Real estate markets 2016: outlook clouds over
Investors continue to rate the Swiss real estate market as attractive, although the outlook has dimmed slightly compared with the previous year. This is the conclusion of the "Trend Barometer Real Estate Investment Market Switzerland 2016" by EY Real Estate.
91 percent of all respondents surveyed by EY consider Switzerland to be an attractive or even very attractive investment location, a slight decrease of six percentage points compared with the previous year. Three quarters of the survey participants also prefer Switzerland as a location in direct comparison with other European countries.
The anticipated developments in the micromarkets vary: For office properties in 1A locations, more than half of investors expect prices to remain stable in 2016. For 1B locations and the periphery, investors largely forecast falling prices.
A similar picture emerges in the retail real estate sector: While 73 percent of investors predict stable or rising prices in 1A locations, the outlook for 1B locations and periphery remains rather negative.
Stable prices for residential, decline for hotel properties
Expectations for the residential construction sector are much more positive: For 1A locations, all investors expect stable to rising prices, and the majority also foresee stable price development for 1B locations and periphery in 2016.
The expected development for hotel property prices is more gloomy: 81 percent of respondents expect prices to fall for peripheral locations. Almost two-thirds also expect property values in 1B locations to fall. Prime locations are assessed somewhat more confidently: While 38 percent expect prices to fall and 53 percent stable, as many as nine percent of respondents expect values to rise.
Zurich is the most popular region
Investors who decide to invest in real estate prefer the Zurich region for office, retail and residential properties. Basel remains a popular investment location, followed by Geneva in the office sector and Lucerne in the retail and residential sectors. In general, investors intend to maintain a clear focus on residential real estate in the future: Six out of ten respondents will prefer residential real estate to other types of use in 2016.
Every year, EY Real Estate surveys investors who have been active in the Swiss real estate market in recent years for the Real Estate Investment Market Trend Barometer. Around 40 players in the industry took part in this year's 6th edition. (ah)
