Prices for residential property are rising again
Prices for residential property are picking up slightly again. The "SWX IAZI Private Real Estate Price Index" shows positive growth of 0.6 percent for multi-family houses, single-family houses and condominiums in the first quarter of this year. In the fourth quarter of 2015, the price increase had still amounted to 0.3 percent, and in the third quarter of 2015, prices even stagnated.
Prices for condominiums (EWO) are rising more strongly than for single-family homes (EFH), and prices for multifamily homes (MFH) are also increasing again after a good year.
After declining in the previous two quarters, prices for EFH returned to positive growth of 0.2 percent in the first quarter (previous quarter: -0.5%). On an annual basis, price growth amounted to 0.4 percent.
The growth rate for EWO is even higher in the first quarter: prices rose by 1.1 percent (previous quarter: 1.1%). On an annual basis, the growth rate is 2.2 percent, bringing it back closer to the long-term average price growth of 2.8 percent.
Multifamily houses are also becoming more expensive again
For the first time in over a year, prices for multi-family houses (MFH) picked up again in the first quarter. Price growth amounted to 0.4 percent (previous quarter: 0.0%). On an annual basis, however, the growth rate is very low at 0.1 percent. "For many institutional investors, the focus has shifted to the renewal of existing portfolios due to the high acquisition prices," says Professor Donato Scognamiglio, CEO of IAZI AG.
One advantage for investors is that the renovation of existing properties helps to reduce investment pressure and also makes higher rental income possible. In the case of unrenovated properties, the reference interest rate, which has been stable for a long time, prevents an upward adjustment of rents.
The performance of MFA in the first quarter is 1.3 percent (previous quarter: 0.8%). On an annual basis, the performance is 3.7 percent. (ah)
