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Tag: KPMG

  • Investors expect record prices for residential property

    Investors expect record prices for residential property

    The players in the real estate market are confident about the future. The mood has brightened significantly compared to the pandemic year 2020, writes KPMG in a message on the consulting company’s current Swiss Real Estate Sentiment Index. In the case of residential property in particular, the respondents assume that prices will rise sharply. The corresponding sub-index has reached a new high of 119.2 points, according to the announcement.

    KPMG analysts explain that the supply of residential real estate is becoming more and more scarce. Here the sub-index fell from 108.0 points in the previous year to 137.1 points. Price increases and shortages show that “market participants regard the residential segment as the clearly preferred real estate investment even more than before”.

    When it comes to prices for office space, the market players are expecting only a slight drop in prices. Compared to the previous year, the expected decline in prices has weakened, the announcement explains. “The users have already adjusted to the new conditions, which is why the focus is currently not on reducing space,” Beat Seger, partner and real estate expert at KPMG, is quoted there. Only in the case of retail space do the respondents continue to assume that prices will fall significantly.

    From a regional perspective, the market players for the Zurich and Lake Geneva regions are expecting significantly higher prices on the property market. Slight price drops are expected in Eastern Switzerland. As in previous years, expectations for Ticino remain clearly negative.

  • Commercial real estate is likely to become cheaper

    Commercial real estate is likely to become cheaper

    KPMG 's Swiss Real Estate Sentiment Index is an indicator of expected developments in the real estate investment market. Last year the index reached an all-time high. This year it has fallen to its lowest level since measurements began in 2012. According to a statement from the consulting company, it is -13.1 points.

    Market participants' assessment of economic development contributes 20 percent to the overall index. The corresponding value fell by 60.9 points to -73.8 points. The second component is the expectation of price developments. After 43.5 points in the previous year, the value here is just above the stability axis at 2.1 points.

    In the case of residential real estate, price expectations remain positive and are close to the 2015 high. Contrary to expectations, actors in the real estate investment market are also not assuming falling prices for real estate in peripheral locations.   However, the prices of commercial real estate are likely to fall. A total of 76 percent of those surveyed assume that the demand for office space in the extended business belt will decrease as a result of the Corona crisis. Sales areas are also likely to be used far less in the future. The respondents see less need for shopping centers in particular. However, experts see more demand for real estate in the healthcare sector and for logistics space.

    The results show that the Corona year has clouded the mood on the real estate investment market. "Because of the expected effects on future demand, the market participants also see opportunities that new user segments will move into the investment focus," Beat Seger, partner and real estate expert at KPMG, is quoted as saying. In addition, residential real estate would contribute to the stability of the asset class.