UBS real estate bubble index declines slightly

Advertised home prices continued to decline in the past quarter, UBS Swiss Real Estate reports. In view of the also slightly falling rents, the price-rent ratio remained almost unchanged: In the second quarter of 2019, 31 annual rents were needed to buy a comparable
To acquire a home of one's own.

According to the survey, the price/income ratio fell for the eighth quarter in succession. According to the survey, just under 6.4 annual household incomes were still required to purchase a home in the mid-price segment. Driven by the increasingly attractive financing conditions, the momentum in the
Mortgage lending, however, slightly higher than a year ago.

From a regional perspective, the greatest imbalances are in the Zurich area and central Switzerland. But there are also increased imbalances in the Basel, Lausanne and Lugano areas, according to the major bank.

Advertised home prices continued to decline in the past quarter. With rents also falling slightly, the price-to-rent ratio remained virtually unchanged: In Q2 2019, 31 annual rents were required to purchase a comparable owner-occupied home. However, this value is still in the upper risk range. According to UBS, an above-average level of the purchase-to-rent ratio indicates a high dependence on persistently low interest rates or implies expectations of future price increases.

In the second quarter of 2017, the real estate bubble index was 1.38 points, which is in the risk zone. Since then, it has fallen steadily. (ah)