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Analysis and survey results: Light on the horizon for the Swiss real estate market - the lockdown shock caused by Covid 19 seems to be over

  • Data Insights
Published by PriceHubble - 12 June 2020

The latest analyses by PriceHubble clearly show how the lockdown due to Covid 19 in Switzerland has affected the real estate market and especially the offer side: Newly advertised online sales offers fall by 37 percentage points in the lockdown phase and online rental offers by 18 percentage points compared to the development in the same period in 2019. The impact on the number of building permits (-39%) also shows that the overall market dynamics had slowed down. However, recent developments and a survey among real estate experts are already pointing to a recovery. All in all, the experts are calm and believe they are coping well with the crisis. Offer prices for residential real estate will remain largely stable over the duration of the pandemic (March to May). House prices are showing somewhat more momentum, rising by 1.8%.

With this analysis and the provision of the survey results, PriceHubble aims to contribute solid facts and thus certainty to the widely vague discourse on how the current Covid 19 crisis has impacted and will impact the real estate market. To this end, market data was analysed and experts in the core markets of Switzerland, Germany and France were interviewed. "Based on the latest developments in advertisements and building applications, we see clear signals that the lockdown shock in the residential real estate market should be overcome for the time being. This is a good sign for all market participants, but especially for real estate agents," says Markus Stadler, Co-Founder, PriceHubble AG, about the analysis and survey results.

After a dry spell, the market is regaining momentum and liquidity, prices are (still) stable

Covid 19 hits the offer side hard: in the period marked by the lockdown, from mid-March to the end of April 2020 ("lockdown"), significantly fewer ads are placed online every day than at the beginning of the year (January - mid-March). The average daily number of advertisements placed decreases by 19% for sales offers and by 22% for rental offers, while this figure rose by 18% for sales offers and fell by 4% for rental offers in the same period last year. This corresponds to an effect from the corona measures (compared to the previous year) of -37% for sales offers and -18% for rental offers.

However, there is light on the horizon, as the supply market has recently recovered. The number of online advertisements has been developing positively again since the end of April: rental offers have increased by 66% and sales offers by as much as 85%.

Offer prices remain largely stable for residential property over the Covid 19 period (March to May) to date: rents are developing slightly positively by 0.9%, while sales prices for apartments are rising by 0.4%. House prices are showing a little more dynamism, rising by 1.8%.

Covid-19 also had a significant influence on the number of building applications submitted for residential properties. Compared to the phase before the lockdown, they fell by 39%. Recently, however, they have recovered significantly and increased by 20%. In the previous year, building applications fluctuated by less than 10% over the same period.

Real estate experts are feeling the effects of the crisis, but are cautiously optimistic and expect stable prices for residential real estate

The majority of the real estate experts surveyed (56%) expect the pandemic to have a moderately negative impact on their business in the next 12 months and anticipate relatively stable prices and rents.

All in all, the experts are calm and believe that they can cope well with the crisis with the help of digital possibilities, even if the slump is clearly noticeable for many. However, the optimism is based on the hope that there will not be a second wave of infection.

See the full study here (German only) and the media release (German only).

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