Tribune de Genève.
According to construction and property market consultants, Wüest & Partner, the Swiss housing market, for both renting and buying, should ease by 0.3% in 2016. In French-speaking Switzerland the declines should be higher with declines of 0.6% predicted in the Lake Geneva region and a fall of 2.1% expected in Valais.
For the first time since 2000, fourth quarter growth in rents was zero at the end of 2015. This shift in the price trend is largely down to the sustained construction of new rental apartments recently. Add to this an expected decline in immigration, to just below 70,000 in 2016, a reference mortgage interest rate that is likely to stay at 1.75%, and the propensity to move is weak says the report.
Because the construction of accommodation has surpassed new demand in many regions, vacancy rates are expected to rise in 2016. The only cantons where rents are expected to rise are Ticino (+0.6%), Bern (+0.3%) and Zurich (+0.4%). The biggest drops are forecast in Valais (-2.1%), Graubunden (-1.7%), the region including Jura-Neuchâtel-Fribourg-North Vaud (-0.8%), and the Lake Geneva region (-0.5%).
Apartment prices are a mixed bag. Those in the lowest and medium price bands went up 3.3% and 0.9% last year. In 2016, Zurich apartment prices are forecast to rise by 2.5%. In French-speaking Switzerland by comparison, apartment prices are expected to fall 2.3% in Valais and 1.8% in Geneva.
Prices for stand-alone houses are expected to be more affected by tightening mortgage requirements than those for apartments. The more limited supply of houses will help to counterbalance the impact of this however. House prices in French-speaking Switzerland are expected to decline in the Lake Geneva region (-3%), especially in Geneva (-3.5%) and also in Valais (-1.5%).
Is a crash coming?
Wüest & Partner say “This situation reminds us of the beginning of the 1990s when Switzerland saw a significant real estate crisis, triggered by falling prices in the Lake Geneva region.”