Housing: Homegate and ImmoScout24 register falling prices
Asking rents in July fell slightly compared with the previous month. This is the result of both the Swiss Real Estate Offer Index from ImmoScout24 and the current homegate.ch rent index.
According to the latest figures from the Swiss Real Estate Offer Index, residential rents in Switzerland fell by 0.8 percent in July 2018 compared with the previous month. This means that asking rents are returning to normal after the sharp price increase in June, according to a media release from ImmoScout24. The rent prices are thus back at the starting level of March this year. Looking at the past twelve months, there was an increase of 0.3 percent.
A monthly rent of CHF 2,190 was demanded on average in Switzerland for a 100-square-meter model apartment in July, with asking prices differing widely between the major regions. According to the survey, Zurich remains at the top of the regional rankings with CHF 2,635 for a 100-square-meter apartment. In eastern Switzerland, rents are CHF 805 lower than in Zurich. The index registered hardly any changes in the Lake Geneva region (+0.1%) and in northwestern Switzerland (+0.1%).
The offer prices for single-family homes fell by 0.4 percent compared to the month of June; the price for a square meter of net living space in July was CHF 6,147 on average in Switzerland. This was CHF 274 less than a year ago, according to ImmoScout24. However, asking prices for single-family homes in July 2017 were at their highest since measurements began at the end of 2010. The decline in asking prices for condominiums also continues. The Swiss Real Estate Offer Index shows a slight decline of 0.1 percent in July. Around CHF 7,000 is being asked for a square meter of condominium property.
Homegate expects rents to continue falling
According to the homegate.ch rental index, which the real estate portal collects together with Zürcher Kantonalbank, asking rents fell by 0.09 percent across Switzerland, and were down 0.35 percent on the same month last year. The index for Switzerland stands at 113.2 points.
The homegate.ch asking rent index measures the monthly, quality-adjusted change in asking rents for new and re-let apartments based on current market offers. The development of asking rents for Switzerland is corrected for the varying quality, location and size of apartments.
According to Homegate, rents in the canton of Geneva fell by 1.4 percent, while asking rents in Ticino rose by 0.85 percent. According to the data, rents in the cities of Geneva and Lucerne fell the most, by 1.2 and 1.1 percent respectively, while Lugano saw an increase.
According to the survey, rents in Switzerland fell by an average of 0.3 percent over the year, with significant regional differences becoming apparent: In the cantons of Zurich (+0.7%) and Bern (+0.4%), rents have risen. Declines were recorded in the cantons of Ticino (-2.0%), Thurgau (-1.1%), Geneva and Vaud (-0.9%) and Aargau (-0.7%). Homegate expects rents to continue to fall. The persistently low interest rate environment and the associated investment emergency among institutional investors will ensure brisk construction activity, while demand will not be able to keep pace with these developments, according to a statement by the real estate portal. It forecasts a decline in rents of 1.5 percent on average in Switzerland in 2018.
