The UBS Global Real Estate Bubble Index 2017 describes housing in Zurich and Geneva as only moderately overvalued. The two Swiss cities rank 6th (Geneva) and 9th (Zurich) in a list of 20 selected global cities.
The top eight: Toronto, Stockholm, Munich, Vancouver, Sydney, London, Hong Kong and Amsterdam are all classified as bubble risk. Only Chicago is undervalued. Since 2012 apartment price are down 10% in Geneva, but up 10% in Zurich.
Matthias Holzhey, a Swiss real estate investment expert at UBS said: “Favorable financing conditions keep demand for home ownership buoyant. Buying a 60 square metre apartment in Zurich costs a skilled service worker six years’ income – a low level compared to cities globally.”
Low costs of financing also help. Low mortgage rates mean effective financing costs are only 10% of the average annual income of a skilled service worker, says UBS. Because of mortgage regulations, the challenge can be getting a mortgage. These regulations are keeping the lid on home prices, according to the report’s authors.
UBS report (in English)