Residential property prices rise, rents fall

Both single-family homes and condominiums were being advertised at higher prices in October. In contrast, there was an easing in asking rents.

The asking prices for residential property offered for sale increased last month. Condominium prices rose by 1,0% in October, while single-family homes were advertised at 0,4% higher values. Over the last twelve months, price expectations for condominiums have risen by 3,2%, while those for single-family homes have risen by 2,4%. This is according to the Swiss Real Estate Offer Index, which is calculated by the SMG Swiss Marketplace Group in collaboration with the property consultancy IAZI.

Those who can afford home ownership will fare more favourably again
“The home ownership market is being boosted by improved conditions: mortgage financing costs have fallen noticeably, and there is a good chance that this trend will continue in the near future,” says Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group. The fact that housing costs in a home can be lower again is also documented by the following example: a condominium with a typical living space of 100 square meters has a market price of just under CHF 900,000 due to the average price per square meter of CHF 8,944 (index level as of October 31 2024). If this property is financed with a maximum possible loan-to-value ratio of 80% (borrowed capital of CHF 720,000), this results in monthly expenses of around CHF 2,200. Compared to a similar rental apartment, these costs often no longer represent an additional burden. There are also other advantages to owning a home, such as freedom of design or independence from rent increases.

“Although the prices for residential property are at a very high level, buying your own home can reduce housing costs. In addition, the signs are good that the improved conditions will lead to an increase in the construction of condominiums in the near future, thereby increasing the supply,” Waeber continued. “However, the conditions for buying single-family homes are noticeably more difficult due to the price level and the limited availability,” Waeber concluded.

In addition to the leaves on the trees, rental prices are also falling
October brings at least a temporary relief in rental prices in all regions. The values for advertised apartments in Switzerland have fallen by 2,8%. Over a year, there is practically no change, with a decrease of 0,2%. Depending on the region, the trend in October deviates from the national average: while the reductions in the Greater Zurich region (-6,8%), in Central Switzerland (-5,5%), in Ticino (-3,1%) and in Eastern Switzerland (-1,2%) are significant, there is little movement in Northwestern Switzerland (-0,9%), in the Espace Mittelland (-0,6%) and in the Lake Geneva region (-0,1%). The next few months will show to what extent these noticeable shifts merely represented a short-term fluctuation.

As at 31 October 2024

Purchase offers for single-family houses throughout Switzerland (CHF/m2)

 Purchase offers for condominiums throughout Switzerland (CHF/m2)

 Rental offers throughout Switzerland (CHF/m2 per year)

The values may contain rounding differences.