House prices fell by 1% during the year to Q1 2020
After about 15 years of uninterrupted house price rises, the Swiss government’s efforts to cool Switzerland’s overheated property market have finally succeeded. House prices dropped 1% during the year to Q1 2020,following y-o-y declines of 1.15% in Q4 2019, 2.25% in Q3, 2.52% in Q2 and 2.05% in Q1. During the latest quarter, prices fell slightly by 0.43% q-o-q.
The property market’s slowdown can be attributed to the Swiss National Bank’s stricter lending criteria, designed to lower housing debt (currently 90% of all household debt). The decision of the central bank to abandon its cap against the euro in 2015 also made Swiss real estate more expensive for foreign investors, thereby reducing demand.
Rents, rental yields: yields are lowish, at around 3.27%
Zurich apartments are expensive, at around €11,467 per sq. m.
|Switzerland: typical city centre apartment buying price, monthly rent (120 sq. m)|
|Buying price||Rate per month||Yield|
|Zurich||€ 1,446,840||€ 3,946||3.27%|
|Geneva||€ 1,377,120||€ 3,827||3.33%|
Recent news. Switzerland's economy grew a minuscule 0.9% in 2019 from a year earlier, sharply down from an expansion of 2.8% in 2018 and the weakest performance in a decade, according to the State Secretariat for Economic Affairs (SECO). The economy is expected to contract by a huge 6.7% this year, as fallout from the COVID-19 outbreak has been worse than initially feared.
In response, the Swiss government introduced an economic stimulus package worth CHF 65 billion (€ 62 billion) to help companies hit by the pandemic. It is the biggest in the country’s history.