The economic upturn should drive demand for Swiss property after a period of record construction and lower rental prices, a survey claims.
The improved economic situation should “revive demand in all segments” of the Swiss housing market, according to Credit Suisse’s Swiss Real Estate Market 2018 reportexternal link, published on Tuesday.
“The strong economic upturn is generating new demand on the owner-occupied housing market, especially since mortgage interest costs are still at very low levels. Prices on the owner-occupied housing market are on the rise again and have returned to the growth zone even in the high-price segment,” it wrote.
According to Credit Suisse, the average age of a Swiss house or apartment owner is 58. It predicts there will be 23,000 additional home owners in Switzerland by 2025, slightly fewer than 2010-2015. The survey found a growing trend among new owners to rent out their properties.
In the rental market, the construction of apartments remains “at a very high level”, the authors wrote. At the same time, demand for rental apartments continues to decline due to falling immigration levels to Switzerland in recent years.
Owing to the large number of rental apartments being built, the Credit Suisse economists predict the number of vacant properties will continue to rise and advertised rents will fall by 1% in 2018. Their forecast is slightly lower than that of a recent UBS property report, which expects a 2.5% drop in rents this year due to greater competition in the rental market.