Pandemic strengthens real estate market
The Swiss real estate market has further increased its attractiveness in 2021 compared to the previous year. Investors see it as a safe haven in the volatility caused by the pandemic. This is the result of the current trend barometer from EY.
Almost all of the 74 experts surveyed by EY for the Real Estate Investment Market Switzerland 2021 trend barometer rate the attractiveness of the Swiss real estate market as attractive to very attractive, EY informs in a message on the trend barometer. Compared to last year, the attraction to investors has even increased slightly again, it is said there. Only 15 percent of those surveyed expect a decline in investment volume. In the 2020 trend barometer, the corresponding value was 17 percent.
“On a global level, we see a lack of investment alternatives, high investment pressure and increasing economic uncertainty as drivers for the real estate asset class,” Claudio Rudolf, author and head of Transaction Real Estate at EY in Switzerland, is quoted in the press release. Specifically, Rudolf names the pandemic and Brexit as the drivers for volatility. “Against this background, investors recognize a safe haven in the Swiss real estate market that is more resistant to crises than in other countries,” says the real estate expert.
However, the barometer also shows differences within the sectors. "While the developments in the different real estate sectors were more closely correlated in the past – according to the motto 'the tide lifts all boats' – the corona pandemic is making the real estate market more differentiated," explains Daniel Zaugg, Head of Real Estate at EY in Switzerland. Sectors that are less risky, such as residential real estate, are likely to benefit from increased risk aversion among investors, the press release said. The barometer for office properties in central locations and the holiday hotel industry sees good opportunities for a quick recovery from the pandemic. Business hotels, office properties in the periphery and shopping centers, on the other hand, do not see any good chances of recovery in the long term either.