Swiss house prices fall for the first time in decades
Good news for prospective buyers (though not so good for homeowners): properties in Switzerland are becoming less expensive — at long last.
While advertised real estate prices remain high in Switzerland, transaction prices — the sum on which the seller and the buyer have agreed on — decreased by 0.2 percent in past three months.
This slightly downward trend follows hikes in both single-family home and apartment prices – of 5.5 percent and 5.2 percent, respectively — in the past 12 months.
This new data comes from Wüest Partner real estate platform, with one of its experts, Robert Weinert, predicting that housing prices will continue to stagnate this year, and even drop further in some cases.
There are several reasons for this new trend reversal.
One is that interest rates have risen sharply in 2022 due to inflation, making mortgages too expensive for many potential buyers.
This hike served to dampen demand for housing and, in turn, reduce the prices of properties as well.
“Added to this is the fact that the private wealth of many households has recently declined,” Weinert said, resulting in lower demand for properties.
Whether this trend will be sustained long term is debatable.
In past years, demand for housing had always outstripped the supply, as construction has been limited due to scarcity of land.
It is possible then that after a period of stagnation or drop in prices, Switzerland’s housing market will bounce back.