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Risks to the Swiss property market remained elevated in the second quarter of 2016, with rock-bottom interest rates propping up demand for residential assets to be rented out for investment purposes. Still, UBS Group AG’s index experienced a “slight” decrease in the period, according to economists Matthias Holzhey and Claudio Saputelli. That’s because of a slowdown in the pace of mortgage growth and a 0.6 percent decline in home prices on an inflation-adjusted basis.
By Catherine Bosley (Bloomberg)
The UBS Swiss Real Estate Bubble Index nudged down in the second quarter of 2016 to 1.32 points remaining in the risk zone. This second consecutive quarterly drop was due to house prices falling in real terms and the declining momentum of mortgage growth. The Swiss regions most exposed to the risk of a price correction are shown on the map below:
UBS report (in English)