Zurich: Home prices continued to rise in 2nd quarter according to ZKB
Home prices are still rising strongly in Zurich, but at a much slower pace in rural areas. According to the ZKB, a slowdown would be healthy for the market.
In Zurich, home prices have continued their rise unperturbed. According to the Zurich Home Ownership Index (ZWEX) of the Zürcher Kantonalbank (ZKB), prices rose by 2.8% in the 2nd quarter and were thus 10.8% higher than a year earlier. Only in the rural municipalities of the canton did price growth level off; it was 0.4 % in Q2. This may be a harbinger of developments in the canton, comments ZKB. Finally, mortgage rates influenced prices with some delay.
The supply of owner-occupied homes has recently increased somewhat, but it remains scarce. According to ZKB, the reduced attractiveness of property due to higher interest rates is not enough to tip the current imbalance into the opposite direction. The cantonal bank speaks of a healthy cooling, which is now possibly pending. "However, we are far away from broad-based declining real estate prices."
Rent increases are enforceable
Meanwhile, the times of oversupply of rental apartments are over, and rental apartments in sought-after locations are once again becoming scarce. The reason for this is investor restraint coupled with increased net immigration. In Winterthur, the number of vacant apartments has fallen to a record low. The SKB believes that higher rents can be enforced. However, rents would rise simply because of higher utility costs. The strong price increase of rental apartments in the city of Zurich of 4.8% according to Homegate is not due to a pass-through of higher heating and electricity costs. The landlords took into account the higher ancillary costs in the insertion of the rental apartments so far only rudimentary: The ancillary costs have increased in the rental advertisements since spring 2020 only by 2 %. There is still something to come for the tenants, concludes the ZKB. (aw)
