Europe

The Switzerland real estate market: what does it look like for this year?

Political performers are stirring things up this year. The elections set to go ahead in May in France and autumn in Germany will disclose whether the established parties are able to disclose voters’ alienation into a coherent course or not, while the Switzerland real estate circumstances have a lot to tell.

French attorney and politician, Marine Le Pen, has not hidden her purpose of having the French electorate vote on EU membership – if she is elected French president – which is not an exclusively ridiculous proposal.

An exit by France could potentially mean the end of the EU, which makes this year very unpredictable. The same applies on the other side of the Atlantic, where an unstable figure has been elected president.

The indecisive referendum based on the tax system in Switzerland happened this year. The Corporate Tax Reform III has been approved in regards to the situation of real estate in Switzerland.

Another prediction for this year is that the interest rates environment will ease and that real interest rates will be low for some time. A lack of decent investment opportunities will likely continue to outbreak investors, while bonds will hardly make a positive influence on collection returns in the future.

After the latest sell-off in indirect real estate investments in November 2016, Swiss real estate funds are once again fairly valued with an agio of 24.8 percent. The pay out revenue alone gives investors a return of 2.8 percent. The dividend return on real estate companies stands at 3.9 percent, although at a higher risk. Net initial revenues on directly held real estate objects generally range from 2.5 percent to 4.5 percent, depending on their location. 

Swiss real estate investments are on a high at the moment and the conditions in the rental markets are not much more reassuring. Recently, rents are deteriorating, both for commercial properties and on the housing market. This is due less to the demand side as a result of the interest rate situation. 

For homeowners, 2017 should be a relatively peaceful year. It has been expected that price movements will be close to zero growth across the country. That’s why it may be a good time to invest in Switzerland real estate property. 

In steadiness, it seems that 2017 will be a year of balance for property owners. Their earnings are still desirable and satisfying and development property is likely to continue to increase in value. Only time will tell but it may be the perfect time to invest.

Written by Gemma Smith

Source for information: www.Credit-Suisse.com 

 

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