Swiss real estate market to decline

Analysts at Swiss bank UBS predict a price drop in commercial real estate at more than 10%. At the same time, prices for office and residential real estate may not go the same path.

Swiss economist Sergio Rossi made a more alarming forecast. In his opinion, the situation in Switzerland will get a hammerblow by the crisis for two reasons. On the one hand, companies and people cannot pay rent due to quarantine restrictions. On the other hand, many of them do not have the opportunity to repay money if they stop receiving salaries.

The Swiss newspaper “Handelszeitung” last summer wrote about a possible collapse in the real estate market, that can be compared to that of 1990. in 2018, Swiss buildings were only 26% funded by equity. Consequently, if prices fall by more than 26%, the average homeowner will go bankrupt and, as in the case of the subprime mortgage lending crisis, there will be a risk of increased auction sales so that lenders can return the mortgage.