by The number of outstanding mortgages increased by 3% on last year Keystone / Urs Flueeler A report by the leading Swiss bank UBS has found an increased risk of a real estate bubble forming in Switzerland’s housing market. 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 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
Topics:
Swissinfo considers the following as important: 3) Swiss Markets and News, 3.) Swissinfo Business and Economy, Business, Featured, newsletter
This could be interesting, too:
Nachrichten Ticker - www.finanzen.ch writes Krypto-Ausblick 2025: Stehen Bitcoin, Ethereum & Co. vor einem Boom oder Einbruch?
Connor O'Keeffe writes The Establishment’s “Principles” Are Fake
Per Bylund writes Bitcoiners’ Guide to Austrian Economics
Ron Paul writes What Are We Doing in Syria?
The number of outstanding mortgages increased by 3% on last year Keystone / Urs Flueeler
A report by the leading Swiss bank UBS has found an increased risk of a real estate bubble forming in Switzerland’s housing market.
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 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.
Falling rents
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.
You Might Also Like
SNB Sight Deposits: Inflation Fear Decreasing, SNB Selling Euros
2021-08-04
Sight Deposits have fallen: The change is -0.2 bn. compared to last week, this means the SNB is selling euros and dollars.
Swiss Private Banks at Odds with Clients over ESG
2021-05-17
Switzerland used to be a place where the rich came with their money to escape the world’s problems, not to confront them. These days, the private banks that dot the pristine streets of Zurich and Geneva are no exception when it comes to the wave of enthusiasm that has broken over the asset management world for better environmental, social and governance standards.
Credit Suisse plots comeback after ‘costly mistakes’ took it to the brink
2021-04-29
As Credit Suisse executives finalised an emergency $1.9 billion (CHF1.75 billion) fundraising from investors last week, a group of the bank’s prized super-rich clients from across Europe and Asia were on a separate Zoom call hosted by law firm Boies Schiller Flexner to plot a class-action suit against the lender.
Swiss ‘too big to fail’ banks pose little risk to the economy
2021-03-21
Three of Switzerland’s “too big to fail” banks no longer threaten to cause a seismic shift in the economy should they collapse, says the financial regulator. Zurich Cantonal Bank, PostFinance and the Raiffeisen banking group are now deemed to have put into place credible plans for an orderly bankruptcy.
Bitcoin Suisse bank license bid hits regulatory roadblock
2021-03-18
Cryptocurrency firm Bitcoin Suisse has withdrawn its application for a banking license, in part because it failed to meet the anti-money laundering requirements of the Swiss financial regulator.
Swiss government expects fast economic recovery in 2021
2021-03-11
After a weak start to the year, Switzerland’s economy should recover rapidly from a heavy coronavirus-driven slump to grow by 3% in 2021, the government said on Thursday. Gross domestic product will fall “significantly” in the first quarter of this year, after Covid-19 restrictions last December, the State Secretariat for Economic Affairs (Seco) said in a statement.
Swiss government wants to keep control of weapons exports
2021-03-07
The Swiss government has rejected calls to allow voters and cantons to set conditions for weapons exports. A people’s initiative collected enough signatures in 2019 to force a nationwide vote on the issue.
Swiss tourism boss says ski resort openings have been justified
2021-02-23
The head of the Switzerland Tourism organisation reckons the decision to open ski resorts in the country this winter has – so far – proven to be a good one.
Tags: Business,Featured,newsletter