Price of single homes decreases in the majority of Swiss cantons during the third quarter
The third quarter of 2022 marks the end of the historic price increase observed over the last 2 years. The price of single homes has decreased in the majority of cantons. The number of properties for sale has increased by 14% since the beginning of the year, indicating that this trend is likely to continue in the months to come.
For the first time in 8 years, we are seeing a decrease in the price of houses in more than 50% of Swiss cantons. In just 3 months, prices have decreased in the range of -1.9% to -0.1% in 14 cantons.
This change in trend is striking compared to last year. During the 3rd quarter of 2021 prices had increased by 3.6% in the canton of Zurich, while this year they have decreased by -0.5% over the same period. The same can be observed in Basel-City, Lucerne and Zug which have decreased by -0.1%, -0.3% and -0.5% respectively in the 3rd quarter of 2022 compared to +3.3%, +3.2% and +3.4% in 2021.
Due to the pandemic, the demand for villas had reached record levels over the last 2 years. But for a few months now, the rise in interest rates and the inflation of energy costs seem to have taken the demand back.
For buyers, the rising rates have a serious impact on the cost of ownership, monthly expenses are now almost 3 times higher than a year ago. In this new context, the advantages of a country house over a city flat is no longer as obvious.
House prices continue to rise in the Alpine cantons. In Valais, the price of houses and apartments increased by 1.6% and 1.7% in one quarter. We observe similar numbers in the Grisons where the value of apartments has risen by 1.5%. The largest drops in prices were recorded in the canton of Glarus (-1.9%) and the canton of Jura (-1.6%).
A small downwards correction in the price of flats was only observed in 2 cantons, -0.3% in Neuchatel and Uri. In other major metropolitan areas, the price for apartments is still on the rise: +1.3% in Zurich, +1.0% in Basel and +0.9% in Geneva.
In the Zurich metropolitan area, prices for apartments in PPEs are slightly decreasing: in the Winthertur district -0.3% and in the Zurich district -0.2%. On the other hand, prices are increasing by more than 1% in most of the surrounding regions; Afflotern (+1.4%), Uster (+1.1%), Meilen (+1.1%), Dietikon (+1.0%) and Bulach (+1.0%). In comparison, the value of houses is falling in 6 of Zurich's 12 districts.
This quarter, in Geneva we recorded a small drop in apartment prices in 4 of the 10 large municipalities; Meyrin (-0.5%), Thonex (-0.4%), Chene-Bougeries (-0.4%) and Geneva (-0.1%).
The largest increases are in Bernex and Carouge with +1.4%. Overall, the upward trend is slowing down significantly; +0.5% this 3rd quarter compared to +2.0% during the same period in 2021.
As a whole, the Swiss market is slowing down under the effects of the rate hike to a pace similar to the pre-covid period. It is difficult to predict what will happen in the next few months, but a further increase in interest rates is highly probable according to specialists. This could lead to even greater price declines across the country.
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