The cost of buying a house in Switzerland has fallen by around 2 percent in the second quarter of 2023, a new study by Wüest Partner has revealed. Experts noted that while the cost of single-family homes has fallen, and the housing market has begun to relax slightly, those looking to purchase property are still largely out of luck.
According to the study, after reaching record highs in 2022, the cost of property in Switzerland has continued the fall, since the last three months of last year. Donato Scognamiglio, CEO of the Iazi real estate consultancy, told SonntagsZeitung that "the days of record prices for single-family homes are over.”
The new data suggested that the cost of a single-family home in central Switzerland fell by over 2 percent in the second quarter of 2023, after dropping by roughly 0,2 percent in the first quarter. While this has not compensated for 2022 - when property prices rose by 5,5 percent on average, according to Wüest Partner - the switch does represent a change in attitude among those looking to buy and sell.
This phenomenon was slower in places where housing supplies are low and demand is high, with the price of single-family homes around Zurich, Basel, Winterthur and Geneva falling by 2 percent or less. Wüest Partner's Robert Weinert told Blick that prices have fallen fastest in rural areas where people have lower salaries and where infrastructure and services are less available.
The decline in house prices is ringing alarm bells among those looking to sell property. Speaking to SonntagsZeitung, Donato Scognamiglio said that he now receives regular post from people who are worried that they will be unable to sell their homes for the price they bought them. “Those who really want to sell will perhaps lower their price by 5 percent or more,” he noted.
The decline in house prices has been blamed on the recent rises in interest rates for Swiss mortgages, with official rates rising to 1,75 percent in June 2023. Sadly for those looking to buy a home, this means that the only reason why house prices are falling is because fewer people can afford to buy them because of higher mortgage costs.
SonntagsZeitung added that some real estate agents have seen demand for housing fall by 20 to 30 percent over the past few months. The changing interest rates have also made housing associations, pension funds and other finance firms veer away from purchasing homes as assets in favour of other investments, for fear of being caught up in a housing bubble