Will the real estate price rally in Switzerland come to an end with rising interest rates? In June there were no signs of a turnaround, at least on the supply side. On the contrary: sellers of condominiums increased their price expectations by a further 1.1 percent within a month. Providers also demanded higher prices for single-family homes in June. However, the surcharge is somewhat lower at 0.3 percent, as shown by the Swiss Real Estate Offer Index, which is compiled by the SMG Swiss Marketplace Group in cooperation with the real estate consulting company IAZI.
It remains to be seen whether the willingness to pay will continue to follow the rising price expectations. This does not seem out of the question, as mortgage costs are by no means the only criterion when buying a home. In addition, unlike Fix mortgages, money market mortgages are still available at extremely attractive conditions. Since prospective buyers already have to demonstrate that they can cope with a mortgage interest rate of around 5 percent due to the applicable affordability rules, a collapse in demand is not to be expected.
Unchanged rents in June
The rental prices offered in advertisements hardly changed at 0.1 percent in June. Asking rents are primarily influenced by the direct demand for living space. This is in contrast to existing tenancies: there could be increases due to the fact that tenancy law is linked to the reference interest rate and general inflation. “The high energy prices are likely to have a far greater impact on asking or existing rents than rising interest rates. Not least in the case of old buildings, these will lead to a significant increase in ancillary costs,” says Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group.
Tag: IAZI
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Turnaround in interest rates not curbing rise in real estate prices for the time being
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Home prices continue to rise
The prices for residential property continued to rise in April, according to the Freiburg real estate marketplace ImmoScout24 , which belongs to the Zurich SMG Swiss Marketplace Group . According to the latest Swiss Real Estate Offer Index compiled by the group in cooperation with the real estate consultancy IAZI , prices for single-family homes rose by 0.6 percent in April compared to March. An increase of 8.3 percent was measured over the last twelve months.
Condominium prices rose even more sharply in April, up 1.4 percent month-on-month. Compared to April 2021, the analysts of the index have observed a price increase of 8.1 percent. In April, however, rents throughout Switzerland remained almost unchanged in both a monthly and year-on-year comparison. A slight decline in asking rents in the greater Zurich region offset increases in eastern Switzerland, north-western Switzerland and Ticino.
For the future, the analysts are assuming a weakening of the price dynamics for residential property. “De facto, mortgage interest rates have been rising for several months, making real estate financing more expensive,” explains Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group, in the press release. “The more these costs rise, the more likely it is that prices will calm down.” The SMG Swiss Marketplace Group combines the digital marketplaces of TX Group , Ringier and Mobiliar .
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Residential property prices continue to rise
The prices for residential property continued to rise in March, according to the Freiburg real estate marketplace ImmoScout24 , which belongs to the Zurich SMG Swiss Marketplace Group . According to the latest Swiss Real Estate Offer Index, compiled by the group in cooperation with the real estate consultancy IAZI , prices for single-family homes rose by 0.5 percent in March compared to February. An increase of 6.6 percent was measured over the last twelve months.
Condominium prices rose 0.4 percent month-on-month in March. Compared to March 2021, the analysts of the index have observed a price increase of 8.0 percent.
In March, on the other hand, rents throughout Switzerland remained constant both on a monthly and yearly basis. Slight declines in advertised rents in the regions of Central Switzerland, Greater Zurich and Northwestern Switzerland offset increases in the Mittelland and Ticino.
“Although the war has not yet had any direct effects on the real estate market, it is likely to have an indirect impact on housing costs through energy prices,” said Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group, in the statement. “Should oil and gas remain at a high price level, this could lead to a significant increase in ancillary costs.” The digital marketplaces of the TX Group , Ringier and Mobiliar are combined in the SMG Swiss Marketplace Group.
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AKB is launching another sustainable bond
The Aargauische Kantonalbank has issued a green bond for the second time. According to a press release , it has a volume of CHF 100 million. AKB’s first green bond was issued in June 2020. Since then, according to a statement from the Kantonalbank, the AKB Green mortgage amounting to 110.4 million francs has been used to build or renovate homes according to climate-friendly criteria. 119.2 million francs have been pledged for further projects.
The Aargauische Kantonalbank takes stock of the CO2 savings achieved every year through the sustainable construction activities it finances. In cooperation with the real estate consultancy IAZI , it publishes so-called impact reporting every year. According to the press release, the projections have shown that after just six months in 2020, the total annual savings in CO2 emissions will be around 232 tonnes. The 232 tonnes of CO2 savings in the projections of the IAZI test report correspond to the annual emissions of around 190 new, commercially available passenger cars, according to the report. The next impact reporting will be created on December 31, 2021.
Green mortgages are financed from the green bond for ecological construction or renovation. In addition to new buildings, according to the AKB, individual energy measures or comprehensive overall renovations to increase energy efficiency or the use of renewable energies are also supported. The bank cites the installation of photovoltaic systems or panels for the preparation of hot water as examples.