House prices fall, condominiums and rents more expensive

There was a noticeable fall in prices for single-family homes for sale in May. In contrast, advertised condominiums and rental properties are being offered at slightly higher prices.

Prices for single-family homes published in adverts fell noticeably in May following the sharp rise in the previous month. The Swiss Real Estate Offer Index, compiled by ImmoScout24 in collaboration with the property consultancy IAZI, shows that asking prices for houses fell by 1,4%. Prices are, therefore, at the same level as a year ago.

“The high price level restricts the potential group of buyers of single-family homes due to the high financial requirements,” says Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group. “For example, a single-family home with a purchase price of CHF 1,000,000 requires a minimum equity capital of CHF 200,000 and a household income of around CHF 160,000 to ensure affordability,” Waeber calculates. In addition, the supply of available properties for this sought-after type of home ownership is limited and is becoming increasingly scarce. This is because, in addition to the slowdown in new construction activity, fewer existing properties have been offered for sale for some time.

The current market situation for condominiums is different: The sellers of condominiums adjusted their asking prices slightly upwards by 0,3% in May. Over the last twelve months, this resulted in a moderate increase of 0,8%. Despite the increase, the market for condominiums also appears to have left the very high growth rates of previous years behind.

Regional differences in the development of rental offers
Rental flats were advertised at 0,4% higher prices on a national average in May. Flat seekers in the Lake Geneva region (+0,9%), the Greater Zurich region (+0,8 %), Northwestern Switzerland (+0,7%) and Central Switzerland (+0,3%) were confronted with higher asking rents, while rents were slightly lower in the Central Plateau (-0,4%), Eastern Switzerland (-0,8%) and Ticino (-0,9%).

As a result, asking rents have fallen slightly since the beginning of the year (-0,4 %). Nevertheless, the pressure on rents is likely to remain dynamic over the remainder of the year due to excess demand, particularly in city centres. People in existing tenancies are likely to be spared further rent increases for the time being. Inflation has flattened out considerably, general costs have stabilised, and the mortgage reference interest rate will remain unchanged at 1,75% as at 1 June 2024.

As at 31 Mai 2024

The Swiss Real Estate Offer Index is published on the ImmoScout24 and IAZI AG websites.
www.immoscout24.ch/immobilienindex
www.iazi.ch/angebotsindizes

Detailed information and statistics about the overall Swiss trend and those in the various regions are available in the Download section.