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Interpretation of the FPRE real estate meta-analysis for November 2023
17 November 2023
The Swiss National Bank’s decision not to raise its policy rate in September marked a hiatus in the battle against inflation that has gone on since mid-2022. Many market participants doubt that this heralds the end of the cycle of interest rate increases. In the office space and rental housing markets, the consequences of the high level of inflation over the last 18 months are only slowly becoming apparent, with rising income from existing rental contracts. A further increase in the reference interest rate is expected to come about in the next six months. In addition, rising net immigration is putting great pressure on the rental housing market, particularly in the urban centres, and this pressure cannot currently be relieved on the supply side. Although the production and construction cost indices are showing marked normalisation patterns, no growth is expected in the building construction segment over the next two years. These trends will cause rents to continue to rise sharply for the foreseeable future. The situation in the owner-occupied housing market remains unchanged. Short supply is causing prices to continue to rise steadily. Higher financing costs have so far depressed demand only slightly.
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Contact us
Sebastian Zollinger
Director, Head Real Estate Advisory, PwC Switzerland
Tel: +41 58 792 28 87
