Raiffeisen does not see any corona city escape
People are turning their backs on cities because of housing prices, not because of Corona. This is shown by the Raiffeisen transaction price index. Condominiums were recently 2.0 percent more expensive. The prices for single-family houses rose by 4.4 percent, the fastest in the history of this index.
Raiffeisen considers the “often rumored thesis of the great Corona city flight” to be insubstantial. “The city remains an extremely attractive residential area. But that literally has its price, ”Raiffeisen chief economist Martin Neff is quoted in a press release on his bank’s current transaction price index. “People are turning their backs on her only because of the high housing costs.”
As the figures for the third quarter of 2021 show, every minute of commuting time around Zurich costs 21,000 francs for a single-family home and 15,500 francs for a condominium. On average, condominiums were traded 2.0 percent more expensive than in the previous year. According to the information, the prices for single-family houses rose by 4.4 percent, the faster than ever since the launch of the Raiffeisen transaction price index.
Compared to agglomeration communities, urban locations have lost their attractiveness. But despite the recent increase in the vacancy rate in the cities, the vacancy rates in the centers are still very low. Overall, Raiffeisen sees a “soft landing” for the rental housing market.
Scarce land is being built on more and more densely. While in 2000 43 percent of new residential units were built in single-family houses, in 2020 it was only just under 11 percent. The proportion of apartments that have been newly created through additions, extensions and other renovations has almost doubled within ten years from 7 to 13 percent.
In the countryside and in tourist regions, AirBnB remains good business despite the pandemic. “Compared to the regular rental housing market, some extremely attractive returns could be achieved there,” says Neff. “In the big centers, however, the business is usually not worthwhile after deducting all costs.”