Prices for residential property rise despite interest rate turnaround
Prices for single-family homes and condominiums continued to rise in the second quarter of 2023 despite the turnaround in interest rates. This is shown by surveys conducted by Raiffeisen Switzerland. The price increases were strongest in central Switzerland.
The market for owner-occupied residential property remains unaffected by the turnaround in interest rates, Raiffeisen Switzerland informs in a release on the current transaction price index of the cooperative banking group. According to the index, prices for single-family homes in the second quarter of 2023 were 1.3 per cent higher than in the previous quarter. A year-on-year increase of 6.1 per cent was observed. Prices for condominiums increased by 1.2 per cent quarter-on-quarter and 5.1 per cent year-on-year.
“In the power struggle between thin supply and higher financing costs due to interest rates, the supply shortage currently continues to hold the upper hand,” Fredy Hasenmaile, chief economist at Raiffeisen Switzerland, is quoted as saying in the statement. The experts of the banking group have observed the greatest increase in central Switzerland. Here, prices for single-family homes increased by 18.8 per cent year-on-year. At the same time, prices for condominiums rose by 11.3 per cent. The smallest increases were recorded for single-family homes in Bern (+3.4 per cent) and northwestern Switzerland (+3.3 per cent). For condominiums, the smallest increase of 1.4 percent was observed in the Zurich region.
Prices for single-family homes went up more in urban municipalities than in other types of municipalities, at 7.3 per cent. For condominiums, tourist communities led the way with a year-on-year increase of 7.9 per cent.