HEV: Demand for apartment buildings remains high

In the office and commercial property segment, the assessment of the experts surveyed by the Swiss Homeowners' Association (HEV Schweiz) is pessimistic. 65 percent of respondents reported a decline in demand for space in this segment in 2016. Even for properties in metropolitan center locations, more than half of the respondents expect prices to fall in 2017.

In the residential segment, the survey results show constant prices for single-family houses and condominiums. However, there were different developments in different regions, according to HEV. While a majority of respondents observed constant prices, there were also observations of falling or rising prices. For the coming year, the experts expect this development to continue.

Demand for multifamily housing appears to be unabated. 70 percent of survey participants observed rising or even sharply rising prices this year. More than half of the experts also expect rising prices for multifamily houses in 2017. Given the high prices paid for investment properties, yields have been falling for years. "This is because although rents continue to rise slightly, the high prices are being paid primarily due to the investment emergency, thus overcompensating for the expected returns. As a result, initial yields on multifamily transactions are diminished," HEV said.

More than 230 experts from the real estate industry participated in the survey conducted by the Homeowners Association. The survey has been conducted since 1980. This year, the HEV reports, the data basis in French-speaking Switzerland has been greatly improved through cooperation with the Fédération Romande Immobilière (FRI). The survey was supplemented at regional level by a survey conducted by Fahrländer Partner, in which more than 700 people took part. (ah)