According to UBS experts, the risk of losing money with real estate has risen drastically – especially outside of large cities rather than at hotspots.
«Money can also be lost in areas outside of centers» says Claudio Saputelli, head of Global Real Estate at UBS. However, this issue is often ignored in the discussion of if it is justified to talk about a price bubble on the Swiss real estate market.
A massive rise of prices is not only evident at the prestigious hotspots of Geneva, Zurich or Engadin, reports UBS in its newest analysis on the Swiss real estate market. Experts from UBS found out that the prices of owner-occupied properties have also risen by 25 % more in around 1,500 municipalities all over Switzerland compared to rented properties.
That means that the price rise is only due to low interest rates and that it is not the result of a situation in which rental costs are rising.
Aarau, Schaffhausen and Frauenfeld especially risky
Anyway, Saputelli and his team also warn of the development of tensions in yield realty. If this risk scenario comes true, the number of people moving there reduces and interest charges rise, prices of apartment buildings will also collapse.
As Saputelli told finews.ch, they would then firstly collapse at those places, where prices had recently risen drastically, which would mean Aarau, Schaffhausen or Frauenfeld. Rented flats in large cities would empty firstly.
IAZI does not exclude Geneva and Zurich
Also Donato Scognamiglio, CEO of realty assessor IAZI shares this view. He has already in 2011 recognized a generally risen price structure for residential properties all over Switzerland (compare to the graphic).
«Generally, I think that if the market corrects, then all of Switzerland will be in the same boat. This might come as a surprise, but the interest rate applies to all of Switzerland» he told finews.ch.
However, Scognamiglio assesses the risk for centers to be at least equally high: «As the market is fluctuating a lot, I don't believe in the safe haven of Zurich».
For the IAZI expert, the risk scenario and the chain reaction could also occur in reverse direction: «If the hot water from the bathtub of Zurich and from Lake Geneva flows out, it will splash out to the Swiss «Mittelland», which is like the living room of Switzerland.»
