Home ownership achieves new record prices
The prices for residential property have reached new highs despite the pandemic. The prices for office space have not yet fallen either. Raiffeisen Switzerland found this in a study. However, the authors recommend adapting construction projects for offices to the post-corona reality.
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The prices for owner-occupied residential property rose to new highs at the end of 2020, informs Raiffeisen Switzerland in a report on the study “ Real Estate Switzerland Q1 / Q2 ”. Specifically, the analysts of the banking group observed an increase in the prices of single-family houses by 2.9 percent and of condominiums by 3.1 percent year-on-year. They expect home ownership prices to continue to rise this year as well. Martin Neff, chief economist at Raiffeisen Switzerland, is quoted in the press release: "For households that meet the affordability guidelines and equity requirements, the purchase of home ownership is and will remain an economically sensible decision from a purely cost perspective".
In the office space market, the pandemic has not yet led to falling prices either, the announcement further explains. "The test is still ahead of this market, because it is characterized by long-term rental agreements and changes to flexible working models do not take place overnight," says Neff. In the case of upcoming construction projects, however, “fundamental questions about the usefulness of a project and its chances in the post-Corona reality should be asked,” recommends the Raiffeisen chief economist.
In the niche market of residential communities (WG), however, the study authors identified clear traces of the pandemic. "The demand for rooms in shared apartments in this dynamically reacting market has literally collapsed, as our analysis of the data from the largest platform wgzimmer.ch shows," explains Neff. The proportion of Swiss people who share their apartment with one or more flatmates increased from 1.5 to 2.7 percent within ten years by 2018.
