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Where property prices are starting to fall in Switzerland

The Local Switzerland
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Where property prices are starting to fall in Switzerland
The property market is showing signs of change in Switzerland. Photo: mastersenaiper from Pixabay

It's well known that buying property in Switzerland involves a big financial hit. But prices in some areas are beginning to stagnate or even fall slightly, showing a change in the market. We look at what a new real estate report shows.


What's happening?

The property market in Switzerland is slowing down slightly, indicating that it's becoming more favourable for buyers. 

For the first time in 20 years, fewer properties are being snapped up, causing real estate prices to stagnate or drop slightly, according to a new report by the RealAdvisor Swiss property platform.

Experts said the number of homes being bought in Switzerland decreased significantly in the first quarter of 2023. 

"Despite a moderate increase in single-family home prices, the overall stagnation and decline in asking prices points to a possible shift towards a buyer's market," said the real estate platform. 

In the first few months of this year, prices for apartments stagnated or even went down in some high-demand areas.

READ ALSO: Why is the price of properties so high in Switzerland?


Where are the costs of homes stagnating, going down or increasing?

The price of apartments in major Swiss cities have dropped slightly, according to the report. 

Zurich recorded a drop of 0.2 percent, and Basel and Lausanne of 0.4 percent, research shows. 

Meanwhile, apartment costs in Geneva and Bern also fell very slightly by 0.2 percent.

Letten Viadukt, Zürich, Switzerland.

Letten Viadukt, Zürich, Switzerland. Photo by Claudio Schwarz on Unsplash

Experts said this might spark worries for investors and homeowners. 

"These declines in prices indicate potential concerns for investors and homeowners in these urban centres," said RealAdvisor.

In contrast, house prices recorded moderate growth, with increases in Geneva (+0.5 percent), Zurich (+0.2 percent) and Basel (+0.3 percent). Lausanne, on the other hand, saw a small decline of 0.3 percent, suggesting that the market for single-family homes has momentum in some areas.

Outliers in the Swiss real estate landscape where residential prices continue to rise at the moment are cities such as Sion (with the costs of homes increasing by 1.7 percent), St. Gallen (+1.6 percent), Zug (+1.8 percent), Lucerne (+1.3. percent), Biel (+1.0 percent) and Fribourg (+0.3 percent).

What's going on across the property market?

Across the Swiss market as a whole, the number of property transactions fell by 17 percent in the first quarter of 2023, reflecting the market slowdown in various regions.

Zurich saw a decrease of 14 percent, while Basel (-30 percent) and Bern (-25 percent) have also seen falling transaction numbers.

"This downward trend in transactions could affect buyer and seller confidence and possibly lead to further stagnation in these significant markets," said RealAdvisor.

Tourist regions such as Graubünden and Valais have not been spared the slowdown, with Graubünden seeing a 36 percent drop in property transactions. 

In French-speaking Switzerland, the situation is not the same all over, with home sales falling in the canton of Geneva (-21 percent) but still increasing in Vaud (+17 percent) and Fribourg (+7 percent).

"These different figures are difficult to explain at this stage and could be outliers," said RealAdvisor.


What could this mean?

Experts said that because asking prices are falling, "market conditions may be shifting towards a buyer's market".

In the Swiss cities of Zurich, asking prices fell by 0.7 percent, in Geneva they fell by 1.3 percent, in Lausanne they dropped by 0.7 percent and Basel by 1.3 percent in the first quarter of 2023. Overall asking prices are around 1 percent lower than in the previous quarter.

For those selling homes, this trend means that sellers may have to adjust their expectations. 

READ ALSO: What you should know if you're considering buying a home in Switzerland

However, experts said that the supply of homes in Switzerland s still very low meaning that demand could still trump this trend. 

There are currently about 35,000 properties for sale in Switzerland. The Alpine nation has a low home ownership rate with around 42 percent owning their home. 

Experts at RealAdvisor said transaction prices typically lag asking prices by three to six months, "and the current downward trend in asking prices may indicate an imminent decline in market values".

"This potential decline could provide opportunities for well-positioned buyers," they added.


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