Swiss realtor optimism at all-time high

Confidence in the Swiss property sector at an all-time high Keystone-SDA

Despite a cautious assessment of the economic situation, the Swiss property sector is looking to the next 12 months with optimism, according to a study by consultancy giant KPMG.

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This is due to significantly higher price expectations, which for the first time also apply to peripheral areas.

The Swiss Real Estate Sentiment Index (Sresi), which has been published since 2012, reflects the industry’s expectations for prices and the economy over the next 12 months. This year, it has reached its highest level ever, rising from its all-time low of -77.4 points in 2023 to its current level of +69.5 points, according to KPMG in a survey published on Wednesday.

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The “Price trend” sub-index posted +89.0 points, compared with +32.0 in 2024, also reaching an all-time high. “Two years ago, the price index was still negative,” the study points out.

“The positive price forecasts for the property investment market are the result of renewed pressure on investment and the expected positive trend in rents,” comments Beat Seger, property expert at KPMG Switzerland.

And for the first time, the positive price forecasts apply to all location categories, although they are particularly evident for central locations. Here, the price index is the highest at +117.6 points, followed by medium-sized centres and conurbations at +90.0 points and peripheral locations at +16.3 points. Last year, these values were still between 40 and 60 points lower.

Price rises in Zurich and Geneva

The property sector expects price rises to be particularly marked in Zurich (+117.3 points), followed by Lucerne and Zug (+108.1 points), Geneva (+84.4 points) and Lausanne (+83.1 points).

Price estimates for Basel (-5.6 points) and Lugano (-6.5 points), on the other hand, are slightly negative, “but significantly more positive than in the last three years”.

“Despite the favourable conditions for property investment in Switzerland, geopolitical challenges and disruptions to supply chains are weighing on the economic outlook, which will also have an impact on the investment behaviour of the property sector,” says Seger.

The strong preference for investment in the residential segment, combined with a lack of construction activity in relation to demand, means that the 400 or so participants in the survey feel that there is a severe shortage of opportunities in this segment.

The index measuring supply is therefore clearly negative, at -107.9 points (compared with -73.3 points). The availability of special properties is also considered to be rather scarce (-38.1 points), while the supply of office, commercial and retail space is considered to be sufficient.

When it comes to affordable housing, around two-thirds of those surveyed rated the impact of regulation as very negative, and 20% as fairly negative. Bureaucracy was seen as a very negative factor by 61% of respondents, while a third saw it as somewhat negative. Political developments (47% very negative, 35% rather negative) and high construction costs (38% very negative, 51% rather negative) are also seen as major obstacles to the availability of these homes.

Translated from French by DeepL/mga

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