Melting prices on property in Switzerland
According
to the Global Property Guide, after 15 years of constant growth in housing
prices, the Swiss government’s efforts to cool down the overheated real estate
market have finally led to success.
Swiss
property prices fell by 2.25% on y-o-y basis in the 3rd quarter of
2019, which is only a continuation of a previously intended track – prices have
been falling for ninth consecutive quarters in a row.
This is
strongly due to the decision of the Central Bank to cancel the ceiling value of
the franc-euro exchange rate in 2015 and stringent lending terms, that
eventually resulted in rise in prices of property for foreign investors and
obviously low demand.
As predict
Wüest and Partner, almost 9 thousand residential properties for rent appear to
be vacant in 2020. At the same time, rental returns are low - about 3.27% in
average. Consequently, rental month income will bring you about 3 700 – 4
000 euros from an apartment valued at 1.3 – 1.5 mln. euros in major Swiss
cities like Zurich and Geneva.
Taking cue
from housing prices, Switzerland's economy, as forecasted by the International
Monetary Fund, will falter sharply to 0.8% in 2020, amid hasty growth by 2.8%
in 2019.
It is a
good sign for those willing to invest in Swiss real estate market. So make hay
while the sun shines!