For the first time in decades, prices on the Swiss housing market have begun to fall, according to real estate advisor Wüest Partner. The firm blamed the sudden drop in house prices on the rising cost of mortgages in Switzerland and the ongoing cost of living crisis.
In the last 20 years, the cost of buying a house in Switzerland has increased dramatically. According to Wüest Partner, reported by Blick, the average cost of a single-family home rose by 5,5 percent in 2022, 20 percent over the last three years, 44 percent over the last 10 years and has more than doubled since 2000.
The prohibitively high prices on home ownership have forced many families and individuals to spend most of their time in Switzerland renting a house or apartment. Studies by SwissLife and MoneyLand in 2022 found that while only 36 percent of the population actually own property, and 60 percent of renters want to buy a home, 49 percent of tenants say they can't afford it. However, in what is good news for prospective buyers, this trend may be about to change.
The study found that the cost of a single-family house actually fell by 0,2 percent in the last three months of 2022, the first time house prices have fallen in 20 years. Speaking to Blick, real estate expert at Wüest Partner Robert Weinert said that the trend is more than “an effect of the season”, predicting that the cost of housing in Switzerland will continue to stagnate and even fall throughout 2023.
He explained that reason for the decline is the higher taxes, costs and fees associated with buying a house. With interest rates on mortgages rising, and house prices still very high, there is a new level of uncertainty which is putting those that can afford a home off buying. “Added to this is the fact that the private wealth of many households have recently declined,” Weinert explained.
However, for those hoping to see house prices drop like they are in the Netherlands and Germany, Weinert countered that while prices may be falling the sheer lack of available housing, particularly in Swiss cities, will stabilise prices. For now at least, in the words of Blick, individual housing will remain a rare and expensive commodity.