House prices in Switzerland: +2% in three months

Context

TL;DR

• Single-family homes: prices +2% in three months
• Apartments: prices +1,7% in three months
• Year-on-year: +3,6% for homes, +5,9% for apartments
• Southern Switzerland: apartments +7,4% year-on-year

Key facts

The national figure

According to the transaction index published by Raiffeisen and reported by ATS, in the third quarter, single-family homes in Switzerland recorded an increase of 2,0% compared with the previous three months. The change concerns prices actually paid, not asking prices; during the same period, apartments rose by 1,7%.

The year-on-year comparison widens the gap between the two types: single-family homes recorded +3,6%, while apartments reached +5,9%. The source therefore measures two different timeframes: the quarterly movement and the year-on-year change. These are not asking prices, but actual prices.

Regional differences

The picture varies depending on the area. Ticino, Graubünden and Valais are considered together as Southern Switzerland. Here, apartments show annual growth of 7,4%, the highest figure in the country, while houses posted +3,3%. For single-family homes, the strongest annual increase was observed in Zurich, at +4,8%.

The type of location also affects how the index is interpreted. In tourist municipalities, the strongest increase for condominium properties is 7,9%. In urban centers, by contrast, the strongest increase concerns houses, at 5,2%. The two results describe different segments of the market and should not be conflated.

Fredy Hasenmaile, chief economist at the cooperative institution, points to the connection with financing. In the statement, he explains that the prospect of a possible end to the Swiss National Bank’s zero-interest-rate policy has caused fixed mortgage rates to rise in recent months. Hasenmaile adds that, although moderate, the rise in interest rates is not enough to alter price dynamics, since supply remains scarce.

Over the past five years, the purchase cost of a house in Switzerland has increased by 4,9% per year; for apartments, growth was 4,8%. For those following costo della vita in Svizzera, the index thus offers a distinct measure: the purchase price of owner-occupied homes.

Operational details

The quarterly figure and the annual figure answer two different questions. The former shows the movement observed over three months; the latter measures the position on an annual basis. Adding the five-year period introduces a third perspective, useful for avoiding confusion between a recent acceleration and the average trend indicated by Raiffeisen.

Three scales for reading the index

The table shows a concrete difference: over the quarter, single-family homes increase more than apartments; in the year-on-year comparison, however, apartments record the larger increase. Over the longer period, the two figures are close, with +4,9% for homes and +4,8% for apartments. The choice of horizon therefore changes the interpretation, even when discussing the same market.

The second key is location. Southern Switzerland comprises Ticino, Graubünden and Valais, but the strongest result for apartments, +7,4%, does not match that for homes in the same area, which stands at +3,3%. For homes, the annual leader is Zurich, at +4,8%. Anyone comparing the cantons must therefore keep property type and area separate, without turning a regional figure into an undifferentiated average.

The type of municipality also matters. In tourist municipalities, condominium ownership records the sharpest increase, +7,9%; in urban centers, by contrast, homes show the strongest growth, +5,2%. The geography of the market and the type of dwelling must be considered together.

The third element concerns financing. The Swiss National Bank, also referred to as BNS/SNB, is mentioned in Hasenmaile's commentary in connection with the possible end of the zero-interest-rate regime; according to the expert, this explains the recent increase in fixed mortgage rates. His assessment is unequivocal: the moderate increase in interest rates has not reversed price dynamics, while supply remains scarce. To complete one's personal financial picture, one can consult the guide to conti bancari in Svizzera, keeping the index data separate from one's own assessments.

Recommended tools

For an updated estimate, use the net salary calculator and the CHF-EUR exchange comparator.

Key points

To turn the index into a comparison grid, you can follow a fixed sequence. The point is not to add external data, but to use the data published by Raiffeisen correctly.

Five reading steps

1. Define the type. State immediately whether the data concerns a single-family home or an apartment. The two categories recorded different changes over the quarter and year on year, so they should not be merged into a single figure.

2. Choose the timeframe. Write whether you are looking at the three months, the year or the last five years. The same statistic changes meaning when it moves from the quarterly change to the annual growth indicated for the longer period.

3. Check the nature of the price. The index measures actual transaction prices, not asking prices. This distinction must be included in the profile before comparing one change with another.

4. Mark the area. If the reference is Southern Switzerland, note that it includes Ticino, Graubünden and Valais. For a comparison of houses, also include the Zurich figure when needed to verify the more pronounced progression.

5. Add the type of location. Separate tourist municipalities and centers: the source associates the higher value of condominium properties with the former and that of houses with the latter.

After these steps, financing should be reported on a separate line. The source attributes the recent increase in fixed mortgage rates to the possibility that the Swiss National Bank's zero-interest-rate regime may end. However, the moderate rise in interest rates is not enough to reverse price dynamics, since supply remains scarce. The profile must therefore distinguish the property price, period, area, type of location and the conditions cited for mortgages.

This method makes it possible to compare the data without turning the quarterly +2% for houses or the +1.7% for apartments into an indication different from the one published. For an initial check of the monthly margin related to income, use calcolatore stipendio.

Source: swissinfo.ch