Prices for Swiss single family homes fell for the first time since before the pandemic, raising the prospect that a market that has boomed for decades may be turning.
(Bloomberg) — Prices for Swiss single family homes fell for the first time since before the pandemic, raising the prospect that a market that has boomed for decades may be turning.
Transaction prices declined 0.18% in the final three months of 2022, data compiled by Zurich-based real-estate consulting firm Wuest Partner show. The last time they fell was in the third quarter of 2019. They’ve risen 5.5% over the past year and more than doubled over the past two decades.
House prices are falling globally as the world emerges from an era of cheap credit. In 2022, property values declined in countries including Canada, Australia and China, and forecasters warn of an impending slump in the UK. The pressure on housing markets is likely to persist as central banks raise interest rates to tackle inflation.
“The market environment suggests that this is more than a seasonal effect,” Robert Weinert, head of real-estate monitoring at Wuest, told Swiss newspaper Blick.
The Swiss National Bank has long been concerned about elevated prices in the country’s property market. In its latest financial stability report, the central bank warned of “stretched valuations,” and estimated housing prices were 10% to 35% above the level justified by fundamental factors.
The SNB has raised interest rates rapidly since the middle of last year to 1%. Switzerland had an interest rate of -0.75% for more than seven years.
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