immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Martin Waeber

  • Turnaround in interest rates not curbing rise in real estate prices for the time being

    Turnaround in interest rates not curbing rise in real estate prices for the time being

    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.

  • No end to the boom in the Swiss real estate market

    No end to the boom in the Swiss real estate market

    Tenants who wish to move must be prepared for higher rents when looking for an apartment. After several months with practically unchanged values, landlords raised their price expectations by an average of 0.7 percent in May. The correction is almost as large as the change registered over the last twelve months (0.9 percent). This is shown by the Swiss Real Estate Offer Index, which is collected by the SMG Swiss Marketplace Group in cooperation with the real estate consulting company IAZI.

    However, the development of rents differs depending on the region. Apartment seekers in the greater Zurich region (1.8 percent) and in central Switzerland (1.2 percent) are confronted with a significant increase in asking rents. The surcharges are lower in the Lake Geneva region (0.5 percent) and in north-western Switzerland (0.4 percent), while in the central region (0.1 percent) and in eastern Switzerland (0.1 percent) there are practically no changes. In contrast, rents have fallen in Ticino (−0.8 percent).

    Home ownership: The boom is not over
    The real estate market is currently in focus mainly because of the high prices for residential property. Against the background of rising mortgage interest rates, many observers expect the situation to cool down soon. However, the asking prices are still on the rise, as the analysis of the advertisements in May shows.

    “For single-family houses, 1.0 percent higher values were required than in the previous month, for condominiums the price growth is 0.2 percent. The interest-related increase in financing costs does not seem to bother prospective buyers much. At least sellers are still assuming an increasing willingness to pay,” says Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group.

    As of May 31, 2022
    The Swiss Real Estate Offer Index is published on the websites of ImmoScout24 and IAZI AG.
    www.immoscout24.ch/immobilienindex
    www.iazi.ch/angeboteindexes

  • Demand for condominiums is highly dependent on region and price

    Demand for condominiums is highly dependent on region and price

    The latest edition of the Online Home Market Analysis from the real estate portal Homegate and the Swiss Real Estate Institute (SwissREI) examines the advertisement data for condominiums for 2020 and 2021. The evaluated advertisements come from the four largest Swiss Internet portals and thus comprise around 85 percent of all online advertisements during the period under review. Detailed reports on the study for all regions can be found here in the online media release .

    For Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group, the latest online home market analysis shows how heterogeneous the Swiss condominium market is: “Overall, the demand for condominiums throughout Switzerland developed somewhat less dynamically last year due to the corona. However, certain market segments have seen lively demand over the past year, particularly in cities.” On average, the duration of advertisements in the low price segment has increased significantly in the cities examined, while it has remained practically unchanged in the higher price segment, although the number of advertisements has increased. “Similar to the rental apartment market, preferences in the condominium market have shifted away from smaller and cheaper to larger and more expensive properties during the Covid19 pandemic,” said Waeber, summarizing the study results.

    Longer advertisement duration despite smaller offer
    The significant increase in the average tendering period for condominiums from 61 to 84 days in 2020 compared to 2019 due to the Covid19 pandemic was confirmed at a high level in 2021 with 85 days. In comparison, the length of listings for single-family homes has fallen from just over 61 days in 2019 to pre-pandemic levels.

    On the other hand, around 20 percent fewer condominiums were offered online across Switzerland in 2021 than in the previous year. With such a severe shortage of offers, one would expect that the average duration of advertisements would also be correspondingly shorter. However, the fact that this has not shortened, but actually lengthened slightly, is evidence of a declining demand for condominiums across Switzerland for 2021.

    Prof. Dr. Peter Ilg, head of the SwissREI institute, sees several reasons for the weaker demand for condominiums: “Condominium prices in Switzerland rose by more than 8 percent on average in 2021. This is the strongest price increase in ten years. Such a significant increase in prices is likely to have had a dampening effect on demand in general. Increasing demand can only be seen in selected regions and in individual upper price segments, in which the buyers were probably able to increasingly resort to advance inheritances». This can be deduced, for example, from the distribution of taxable assets and homebuyers by age group. In the canton of Zurich, for example, the over-54s have more than half of the taxable assets, while across Switzerland the majority of home buyers are under the age of 55, Ilg continues. 

    Regional differences in the duration of advertisements are increasing
    From a regional perspective, the differences in the duration of advertisements in the eight major regions examined in 2021 have become more pronounced. In the Zurich region, where sellers have to advertise a condominium for the shortest time in Switzerland, the duration of the advertisement was reduced significantly by around a quarter to just 43 days (minus 14 days). In the two regions with the longest average duration of advertisements for a condominium, on the other hand, they continued to rise significantly, each at around 22 percent; the Vaud/Valais region recorded an increase of 18 to 98 days, Ticino by 25 to 139 days.

    In absolute terms, the greatest reduction in the length of advertisements was seen in the Central Switzerland region. After a decline of 19 days (minus 27 percent) for 2021 with 51 days, this region now has the second shortest advertisement duration of all eight regions surveyed, right after the Zurich region. The Geneva region, on the other hand, which still had the shortest advertisement duration in Switzerland at 52 days in 2020, fell back to third place in 2021 after an increase of 12 percent (plus 6 days).

    Increasing demand only in three out of eight regions examined
    The combination of the change in the duration of advertisements and the change in the number of advertisements allows conclusions to be drawn about the change in demand in the regions examined. In the three regions of Ticino, Vaud/Valais and Geneva, for the year 2021, despite a shortage of supply (i.e. a declining number of advertisements), there has been a significant increase in the duration of advertisements in some cases and thus a shrinking demand for condominiums. For the three regions of Central Switzerland, Northwestern Switzerland and Zurich, on the other hand, increasing demand (larger percentage decline in the length of advertisements than in the number of advertisements) can be observed. The other two regions (Eastern Switzerland and Espace Mittelland) show constant demand for 2021.

    Growth in demand for city apartments, especially in the upper price segment
    In addition to the eight regions, the Online Home Market Analysis also examines eight Swiss cities. When analyzing the demand for condominiums, a closer look at the price segment shows that demand in Basel, Lausanne, Geneva and Lugano in particular has increased. Both in the high price segment (CHF 1.5 million – CHF 3.0 million) and in the low price segment (CHF 0.3 million – CHF 0.5 million). In the high price segment, demand increased overall in six of the eight cities surveyed – in addition to Basel, Lausanne, Geneva, also in St. Gallen and Lucerne – while in the low price segment, the remaining four cities recorded constant or falling demand. This increased demand in the high price segment is now taking very different forms; While in Basel the declining length of advertisements in particular led to higher demand, in Geneva a much higher increase in the number of properties on offer compared to the length of advertisements indicated this conclusion.

  • Home prices continue to rise

    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 .

  • Residential property prices continue to rise

    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.