Swiss Real Estate Market Resists Rates Reversal
In its latest report, Bank Raiffeisen Bank points out that prices are still on the rise in Switzerland and details the various factors that have a stabilizing effect on prices.
The first factor is inflation, which will be contained at +2.8% in 2022, which is three times lower than the dynamics observed in the European Union. Thus, the shock of rate increases is much smaller in Switzerland than in other European countries. The conditions for financing real estate have therefore deteriorated less than in other countries. By opting for money market loans such as the Saron, property buyers have the opportunity to reduce the burden of fixed mortgages (5 and 10 years). This freedom of choice has cushioned the “interest rate shock” and is helping to stabilize prices, according to Raiffeisen experts.
In addition, the Swiss tax system mitigates the impact of rising interest rates on costs by allowing interest expense to be deducted from taxable income.
Finally, the supply of condominiums and villas remains very limited due to the permanent drop in the number of building permits issued in recent years and the slowdown in construction activity.
In conclusion, according to Martin Neff, chief economist at Raiffeisen, the unique characteristics of the Swiss economy (absence of unemployment, strong franc, inflation under control and a dynamic economy) and its real estate market with its many stabilizing elements should once again allow the market to remain dynamic. There is therefore a scarcity effect that cannot be corrected!
Capvest is currently marketing several new projects, all of which have building permits in force and construction sites open:
“Les Vignes d’Ehden” in AniĂšres (GE) – rag.lesvignesdehden.ch
“La Fontaine d’Ehden” in Corseaux (VD) – rag.lafontainedehden.ch
“Les Rives d’Ehden” in La Tour-de-Peilz (VD) – rag.lesrivesdehden.ch