The UBS Swiss real estate bubble index has risen from 1.78 to 1.90 points, in the second quarter of 2021, remaining in the ‘risk zone’, according to a report published on Tuesday.
The increase is driven by a rapid rise in prices in the Swiss residential housing market, as well as growth in the household mortgage volumes.
According to their analysis, the price of residential housing rose 5.4%, the largest increase in eight years. This rise was not matched by a similar rise in income.
While the average price of residential property was 6.5 times annual income before the Covid-19 pandemic, it is now estimated at around 7.1 times annual income, the report says. This ensures houses are becoming increasingly unaffordable.
The number of outstanding mortgages also increased by 3% on last year. While growth rates remain below the all-time high, the report warned that further acceleration would be cause for concern.
More
More
Pandemic affects Swiss housing market
This content was published on
People in Switzerland have been looking for bigger or second homes during the coronavirus pandemic, fuelling housing shortages and pushing prices up.
While house prices have risen, the rent being received by landlords has dropped by 3.2% in the last year. This constitutes the steepest drop since 1996, according to the report.
The widening gap between the cost of residential property and the cost of rental means that the achievable returns of landlords have fallen to record lows.
Despite this, investment in residential property remains high. The report says that increasing property prices have become the main motivation behind purchases.
While residential bubble index figures are currently high, the report predicts that the post-Covid economic recovery will decrease the index down to 1.69 by the fourth quarter of 2021, below the risk zone.
Despite this, post-pandemic imbalances within the residential housing market are expected to be considerably higher than before.
Popular Stories
More
Swiss Abroad
Thousands of emigrants’ descendants in Argentina demand Swiss citizenship
This content was published on
Paul Hottinguer, a member of one of Switzerland’s most famous banking families, will face trial in Paris for tax fraud and money laundering.
Swiss man who died in Iranian prison had photographed military site
This content was published on
The Iranian judiciary said that the Swiss man who died in an Iranian prison on January 9 had been detained for photographing a restricted military site.
Swiss researchers patent new device for avalanche detection
This content was published on
The WSL Institute for Snow and Avalanche Research said it has granted a group of Swiss researchers a patent for a device to enhance avalanche warnings.
Berset discusses ECHR climate ruling implementation at Davos
This content was published on
Switzerland has submitted a report on the court's ruling in Strasbourg. Berset told Justice Minister Beat Jans that the Council of Europe is reviewing it.
This content was published on
A 27-year-old ski tourer has died in the hospital in Sion, in southwestern Switzerland, after being caught in an avalanche on Saturday.
Swiss health minister criticises Trump’s ‘rash’ WHO exit
This content was published on
Switzerland has expressed “deep” regret over Trump’s decision to withdraw from the WHO, Swiss Health Minister Elisabeth Baume-Schneider said in Davos.
This content was published on
Job vacancies in Switzerland fell by 10% in 2024, marking the first negative annual balance since the Covid-19 pandemic, says Adecco.
Swiss president meets Zelensky in Davos amid tensions with Europe
This content was published on
Swiss President met Zelensky at Davos. As Zelensky thanked Switzerland, Keller-Sutter said it's too early to discuss a new summit, awaiting Trump's actions.
Basel diocese files five claims of sexual abuse in Swiss Catholic Church
This content was published on
The diocese of Basel has received 141 reports of sexual abuse since the publication of a sweeping study on violations in the Catholic Church by the University of Zurich in 2023.
Swiss president calls for open markets and stable institutions in WEF speech
This content was published on
Swiss President Karin Keller-Sutter was among speakers at the WEF in Davos to make the case for fair competition, a day after Donald Trump became the 47th president of the United States.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Pandemic affects Swiss housing market
This content was published on
People in Switzerland have been looking for bigger or second homes during the coronavirus pandemic, fuelling housing shortages and pushing prices up.
Covid restrictions raise prices of Swiss holiday homes
This content was published on
The price of holiday homes in the Swiss Alps increased last year due to travel restrictions and limited supply according to a survey by the UBS bank.
Pandemic boosts Swiss market for villas and holiday homes
This content was published on
The demand for second homes and detached houses in Switzerland has been increasing since the easing of Covid-19 restrictions.
This content was published on
Residential property prices in Switzerland rose sharply in the final quarter of 2020, and by an average 2.5% for the year as a whole.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.