Switzerland: the real estate market driven by the economic rebound (Wüest)

9 February 2018

Zurich (awp) - The real estate market should be driven by the cyclical rebound in Switzerland. Housing prices are expected to rise over the next few months, according to real estate consulting firm Wüest Partner Friday in its Immo-Monitoring 2018 study.

Access to the property is still of great interest, while the availability of objects has further diminished. The supply of homes for sale fell 12% last year and the number of single-detached homes available in the market is at a low that had not been reached since 2006, according to the study.

For rental housing, Since the high of the second quarter of 2015, rents proposed fell by 3.3%. Yet, the authors do not expect an acceleration in the observed price decline, despite rising vacancy rates.

Their optimism is linked to the economic upturn in Switzerland, as it should bring employment, which is expected to rise by 1% in 2018. According to the authors, this could increase the attractiveness of Switzerland for workers foreigners and thus encourage immigration. The Swiss population is expected to grow by almost 1%, which will be reflected positively in housing demand.

The authors add that the increase in purchasing power and the improvement of consumer morale will also be likely to support the real estate market.

However, rental prices for office space should remain stable, according to Wüest Partner. Investments in new buildings are expected to increase by around 4% and the absorption of new space will be more difficult in agglomerations than in city centers. Rents for commercial space should remain under pressure.

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