immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Martin Neff

  • Swiss real estate market – turnaround in interest rates, so what?

    Swiss real estate market – turnaround in interest rates, so what?

    After years of oversupply, the signs on the rental housing market are now clearly pointing to a shortage. Although demand will continue to exceed the supply of housing in the future, the real estate industry has so far not reacted with higher housing production. As long as rents do not rise sharply, there will be no incentive to expand residential construction in the current market environment. “The remaining vacancy reserves will soon be exhausted. Because the demand from immigration, individualization and demographic aging continues to increase,

    while at the same time fewer and fewer new homes are being built. Significant increases in asking rents are therefore only a matter of time and the topic will move up the political agenda,” says Neff.

    Densification progresses slowly
    It's getting tighter and tighter in Switzerland. The new buildings in this country are getting taller, the apartments in them are getting smaller and more and more people live in the residential zones. So the scarce land is being used more and more economically. However, because land use per person continues to rise and more and more people are living in Switzerland, the pace of densification is far from sufficient to stop urban sprawl. “High hurdles stand in the way of the faster densification demanded by spatial planning. The construction costs of projects with higher density are significantly higher than for a new building on a green field. In addition, strict, inflexible and inconsistent building and zoning regulations limit, complicate or make densification efforts impossible. A very liberal objection practice increases the planning effort for projects with high consolidation potential and leads to ever greater administrative effort," says Martin Neff. For example, the average time from the submission of a building application to the granting of a building permit for buildings with more than three apartments has increased significantly in the last 20 years from 92 days to 150 days.

    Bursting bubbles in the virtual world
    Trading in digital assets based on blockchain technology has experienced a real hype in the course of the cryptocurrency boom. In the meantime, land and real estate can also be purchased in the digital world, the so-called metaverse. The more attractive a piece of digital soil is, the more people will pay for it. The relative attractiveness is strongly defined by how many players are in the vicinity of the property on average. The market for digital real estate has experienced enormous price increases. At the beginning of January 2021, for example, in one of the best-known Mataverses "The Sandbox", the average plot of land was still being traded for less than 150 US dollars. By the end of the year, the price had risen to over $16,000, an increase in value of almost 11,000 percent. By the end of June 2022, prices had collapsed to $2,500. Such a bubble formation with subsequent bursting has been observed in many Metaverse projects in recent months. Among other things, this is favored by the fact that many projects are tied to cryptocurrencies for technical reasons, the future of which cannot yet be estimated either. "Due to the extreme volatility, the obvious tendency to bubble and the questionable intentions of many providers, virtual real estate remains primarily a playing field for speculators who are very willing to take risks," says Martin Neff.

    The “Immobilien Schweiz” study offers a detailed quarterly assessment of the Swiss real estate market. The current study and further information are available at raiffeisen.ch/casa.

  • Privately used residential property is becoming more expensive

    Privately used residential property is becoming more expensive

    According to a media release from Raiffeisen Switzerland on the quarterly transaction price index, owner-occupied homes have to dig deeper into their pockets than in the first quarter and also compared to the previous year. Accordingly, the purchase of a condominium increased in price by 3.5 percent in the second quarter. Compared to the same period last year, there was a price increase of 7.7 percent. A single-family house costs 1.3 percent more than in the previous quarter. Year-on-year, prices for this type of property have risen by 8.7 percent.

    According to the Raiffeisen chief economist Martin Neff, who was quoted in the media release, the price dynamic is due to the shortage of supply in the home ownership market. Neither the interest rate hike nor the heightened uncertainties in the reporting period would have changed that.

    In the case of condominiums, the highest increase in prices compared to the previous year was in the Zurich region, where prices rose by 11 percent. In contrast, the Bern region has the lowest rate compared to 2021 at 3.5 percent. 10.6 percent more has to be paid for a condominium in tourist areas.

    The price spiral is also driving up the costs for single-family homes. In the Western Switzerland region, the segment has increased in price by 12.8 percent, in the Northwestern Switzerland region the value is 10.4 percent.

    Broken down by place of residence, there is a pronounced desire for private home ownership in the countryside, where the prices for a single-family house have soared by 12 percent. In city centers, house prices are 8.7 percent higher than last year.

  • Raiffeisen warns of housing shortage

    Raiffeisen warns of housing shortage

    With interest rates rising again, the “rule of thumb, now almost set in stone”, according to which owning is financially cheaper than renting, “has started to falter”, writes Raiffeisen Switzerland in a statement on the current issue of its quarterly study “ Real Estate Switzerland ”. However, there are still financing solutions that make home ownership more financially attractive than renting, the statement continues. In addition, the demand for one’s own four walls is also being driven by “various non-financial” aspects.

    However, the demand for residential property, which continues to rise, is “meeting on a supply that has now completely dried up,” explains Martin Neff in the press release. “Hardly any new properties are being built and existing owners only sell their houses and apartments in exceptional cases,” says the chief economist at Raiffeisen Switzerland.

    The analysts at Raiffeisen Switzerland have also noticed a shortage of supply on the market for rental apartments. Due to high vacancy rates, the construction of new apartments has already been curtailed in the past, writes Raiffeisen Switzerland. In addition, demand has increased due to demographic aging and a “trend towards individualization”. In 2021, the number of newly founded households exceeded the number of newly built apartments for the first time since 2009.

    “Housing production will not be able to keep up with demand in the future either,” predicts Neff. “So the housing oversupply that prevailed until recently could soon become a housing shortage.”

  • Raiffeisen expects prices to slow down for home ownership

    Raiffeisen expects prices to slow down for home ownership

    After rising in the previous quarters, prices for owner-occupied residential property continued to rise in the first quarter of 2022, Raiffeisen Switzerland informed in a statement on the current transaction price index of the cooperative banking group. The prices for single-family homes throughout Switzerland increased by 1.2 percent compared to the previous quarter and by 9.5 percent year-on-year. 0.2 percent more had to be paid for owner-occupied condominiums than in the previous quarter. Year-on-year, prices increased by an average of 6.6 percent.

    The price dynamics on the market for owner-occupied residential property have therefore weakened somewhat compared to the previous quarters, according to the statement. “Due to the recent sharp increase in mortgage interest rates and the restrictive equity and affordability requirements, which are increasingly restricting the group of buyers as prices rise, we expect the price dynamics in the market for owner-occupied residential property to continue to weaken,” says Martin Neff, Chief Economist at Raiffeisen Switzerland. quoted there.

    Viewed by region, however, there are major differences in the development of prices. The prices for single-family houses in the Lake Geneva region and in eastern Switzerland rose by 15.3 percent and 12.5 percent, respectively, above average in a year-on-year comparison. The lowest year-on-year price increase of 4.0 percent was registered in eastern Switzerland. In addition, analysts have observed above-average increases in house prices in tourist communities and urban centers.