Condominiums become more expensive in the first half of the year

Condominiums become more expensive in the first half of the year Keystone-SDA

Residential property prices in Switzerland showed varied trends in the first half of 2024. While the cost of condominiums rose compared to the end of 2023, single-family homes became more affordable over the same period.

According to a report from mortgage broker Moneypark and Zurich-based real estate data startup Pricehubble, condominium prices increased by an average of 0.5% across Switzerland in the first half of the year. Conversely, prices for single-family homes dropped by 2.2%.

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However, when compared to a year ago, prices for both categories saw a 1.9% increase.

Regionally, the decline in prices for detached houses was more pronounced in French-speaking Switzerland (-4.0%) than in German-speaking Switzerland (-1.3%). Owner-occupied apartment prices rose in German-speaking Switzerland (+0.6%) but became slightly more affordable in French-speaking Switzerland (-0.2%).

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Saron mortgages no longer popular

The report highlights a significant shift in the type of financing chosen by homeowners. The volume of Saron mortgages taken out fell by 58% compared to the second half of 2023. Despite two key interest rate cuts by the Swiss National Bank (SNB) in the first half of the year, these mortgages have lost their appeal. The share of money market mortgages in all mortgages granted dropped significantly from 19% to 8%.

Fixed-rate mortgages with terms of up to 10 years have become cheaper since October 2023, capturing market share from Saron products. More than a third of the mortgages concluded in the first half of the year were in categories with terms between 5 and 9 years and 10 or more years. Additionally, short-term fixed-rate mortgages with terms of 1 to 4 years achieved a record market share of 15%.

Market dynamics among mortgage providers

Moneypark and Pricehubble observed that cantonal banks particularly benefited from Credit Suisse’s recent difficulties. These banks increased their margins and did not offer the most competitive conditions in the market during the first half of the year.

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Consequently, the mortgage volume brokered by Moneypark shifted significantly in favor of insurance companies and pension funds.

Adapted from German by DeepL/amva

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