The financial watchdog has cautioned against a real estate bubble that could lead to a crisis on the Swiss property market.
This content was published on
1 minute
Patrick Raaflaub, head of the financial market supervisory authority (Finma), says low interest rates, strong demand for housing in some regions of the country and a conviction among potential buyers that real estate investments are not a risk were the perfect ingredients for a bubble.
It leads to a rapid increase in valuations of real property until they reach unsustainable levels.
In an interview with the NZZ am Sonntag newspaper Raaflaub said his agency would be vigilant.
However, he added it was difficult to talk banks into a more restrictive mortgage policy.
“But once the interest rates are rising and prices continue to drop the real estate bubble will burst,” Raaflaub said.
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Swiss economy negotiates difficult path
This content was published on
The economic climate looks brighter for Switzerland than most of Europe, with an upturn for manufacturers and consumer sentiment still high. But the struggling euro and a surging housing market give some cause for concern. On Tuesday, the State Secretariat for Economic Affairs (Seco) revised its prediction for gross domestic product (GDP) growth this year…
This content was published on
While the residential market is expected to remain largely stable, the global economic recession is more likely to hit demand for business premises. But this is not mirrored by the rate of projects under construction. The latest real estate market report by Credit Suisse bank has warned of a probable disparity between supply and demand…
This content was published on
The benign outlook is good news for Switzerland where the sure-footed nature of the housing market has contrasted to the carnage created by bursting bubbles in a host of other countries. While house prices have been crashing in countries such as the United States, Britain and Spain, the Swiss market has experienced above average growth…
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.