In its 2014 report on the state of the Swiss property market, Swiss bank Credit Suisse predicts an end to the “gold-digger mood” that has prevailed in recent years. The report cites tougher regulations as well as the recent vote to curb immigration as reasons.

According to Credit Suisse’s real estate analysts, the housing market will remain stable for the time being. Rising prices in greater Zurich, central Switzerland and in the Lake Geneva region will lead to a shift in demand in more affordable areas.

It’s a different story for office buildings. “The market for office space is heading for an increasing oversupply which is likely to result in more rent reductions and valuation corrections in the course of this year,” stated the report, published on Wednesday.

The Credit Suisse economists believe that the residential rental sector can “count on a further year of robust demand, but is moving in the wrong direction in planning terms”. They said that while demand is based in urban areas, too much capital is being invested in housing in rural areas.

Regulations such as the countercyclical capital buffer (CCB) for banks that give mortgage loans also had an effect, continued the Credit Suisse report. In a statement earlier this year, the Swiss National Bank (SNB) said that “imbalances on the Swiss residential mortgage and real estate markets have increased further since the [cabinet] activated the CCB in February 2013”.

The SNB suggested that the CCB be increased from 1% to 2% of risk-weighted positions secured by residential property situated in Switzerland; the cabinet approved the proposal in January.

Slowdown aside, the Credit Suisse report did not foresee a real estate crash anytime soon, saying that only a strong increase in interest rates or an economic crisis could bring the market out of step.

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