A year to forget? Not for homeowners and tenants!
Despite the pandemic, or perhaps because of it: Homeowners: In 2021, homeowners enjoyed substantial increases in value. In return, tenants benefited from a minimal drop in prices when looking for an apartment. This is shown by the Swiss Real Estate Offer Index on the basis of advertisements for purchase and rent.
2021 is unlikely to be remembered as a bright year – the never-ending pandemic sends its regards. However, a reliable source of positive news has been the real estate market. Owners of condominiums were able to post an increase in value of 7.3 percent over the course of the year, while the increase in single-family houses was almost as high at 6.9 percent. This is shown by the evaluation of sales advertisements as part of the Swiss Real Estate Offer Index, which is collected by the Swiss Marketplace Group in cooperation with the real estate consultancy IAZI.
The reason for the significant increases in value is probably not solely due to the changes in living requirements due to the pandemic. The economy is also developing solidly, immigration is continuing and the supply of land is becoming increasingly scarce. At the same time, consumer prices have risen sharply, which further increases the attractiveness of tangible assets such as home ownership as protection against inflation.
No bad news for tenants either
2021 also meant it with tenants: inside not bad. Anyone looking for a new apartment was able to benefit from a minimal decline in asking rents of 0.3 percent over the year on average. The fact that the rent trend tipped into the red is thanks to a veritable year-end spurt: In December, a nationwide drop of 0.9 percent was registered.
What will 2022 bring for the Swiss real estate market? “Under the current conditions, the new year should also come up with rising property prices. Whether the trend turns around is largely up to the monetary authorities: The American central bank (Fed) has announced that it will raise the key interest rate faster than planned. If the European (ECB) and Swiss monetary authorities (SNB) join in, prices would also fall in this country, ”says Martin Waeber, Managing Director Real Estate, Swiss Marketplace Group.