Property prices fell by 0.4% between the first quarter of 2022 and the same period last year, according to the Swiss Federal Statistical Office. Yvan Schimdt, independent consultant and real estate economics expert, explains the state of the market on La Matinale.

The fall in prices mainly concerns condominiums. Single-family home prices continue to rise. For Yvan Schimdt, we'll have to wait a few more months to see if a trend really emerges.

“For the first time in a quarter, we can see that house prices are falling somewhat after having risen continuously. But with this kind of indicator, it's more prudent to wait two or three quarters to see if the trend is confirmed.”

A different situation for renters

While it's not yet certain that the fall in prices will be confirmed, for the expert, it would be at the very least likely that they will stabilize. “We've been sensing a limit to the increase for some time now. It's a question of calculating the ability of households to meet their expenses. They have to be able to pay the interest to the lending institutions. This creates a ceiling that mechanically prevents prices from rising.”

As far as tenant rents are concerned, Yvan Schimdt points out that the situation is different: “Although there has been some stabilization in recent years, there will be no drop, as this is linked to the reference mortgage rate, which has been falling until now. So there won't necessarily be any impact for tenants, and this is something that's fairly uncorrelated with the PPE housing markets.”

Institutional investors

Prices could also fall in response to the strategy of institutional investors. Roland Bron, head of French-speaking Switzerland for wealth management consultancy VZ, tells La Matinale that pension funds are beginning to turn away from real estate investments.

“We observe that demand has fallen off a little, because pension funds now have investment alternatives in the field of secure investments with yields of around 1%. So they are no longer faced with negative returns in this area.

Shortage of materials

Yvan Schimdt explains, however, that the war in Ukraine could change the situation, with its attendant shortage of building materials. “This will have an impact on both owner-occupied and rental housing. Construction costs will rise by around 10%. We'll have to see what increase households will be able to bear.”

“We're not going to be able to have a 10% increase in prices all at once. Builders will have to reduce some of their margins, but they'll only be able to do so up to a certain point. So it's a fragile situation for the construction sector.

Interview by Valérie Hauert/asch

Published on May 18, 2022 at 10:49 Updated on May 18, 2022 at 11:15

About Cerise Immobilier gérance et courtage, real estate agency in Villars-sur-Ollon

Cerise Immobilier gérance et courtage is a real estate agency located in Villars-sur-Ollon in the canton of Vaud, Switzerland. We offer services in sales, purchases, rentals, PPE management, property valuations and tax and legal advice. We cover the Chablais region of Vaud, including the communes of Ollon, Gryon, Bex, Aigle, Les Diablerêts, Chessel, Leysin, Lavey, Noville, Roche, Yvorne and Villeuneuve.

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