Raiffeisen expects prices to slow down for home ownership
The prices for owner-occupied residential property increased further in the first quarter. Compared to previous quarters, however, the momentum has weakened slightly. This is shown by surveys by Raiffeisen Switzerland. The analysts expect the price momentum to weaken further.
After rising in the previous quarters, prices for owner-occupied residential property continued to rise in the first quarter of 2022, Raiffeisen Switzerland informed in a statement on the current transaction price index of the cooperative banking group. The prices for single-family homes throughout Switzerland increased by 1.2 percent compared to the previous quarter and by 9.5 percent year-on-year. 0.2 percent more had to be paid for owner-occupied condominiums than in the previous quarter. Year-on-year, prices increased by an average of 6.6 percent.
The price dynamics on the market for owner-occupied residential property have therefore weakened somewhat compared to the previous quarters, according to the statement. “Due to the recent sharp increase in mortgage interest rates and the restrictive equity and affordability requirements, which are increasingly restricting the group of buyers as prices rise, we expect the price dynamics in the market for owner-occupied residential property to continue to weaken,” says Martin Neff, Chief Economist at Raiffeisen Switzerland. quoted there.
Viewed by region, however, there are major differences in the development of prices. The prices for single-family houses in the Lake Geneva region and in eastern Switzerland rose by 15.3 percent and 12.5 percent, respectively, above average in a year-on-year comparison. The lowest year-on-year price increase of 4.0 percent was registered in eastern Switzerland. In addition, analysts have observed above-average increases in house prices in tourist communities and urban centers.