ZURICH - Risks in the Swiss property market eased slightly in the second quarter, Moneypark said on Wednesday. Its Real Estate Risk Index fell from 3.7 to 3.5 points, back in the middle of a five-point scale, and the first improvement in three years.
The firm credited a better economic mood and interest rates that are still low. The labour market pulled the other way. Average unemployment in the study rose to 3.1 percent, from 3.0 percent the quarter before and 2.8 percent a year earlier. Moneypark said that can squeeze some households out of owner-occupied homes and soften demand.
Prices are still running ahead of inflation
House prices rose 3.8 percentage points faster than inflation in the quarter. The gap was 4.2 points in the previous quarter and 5.0 a year earlier, so the overshoot is narrowing. It has not flipped. Moneypark sees no broad price correction, because supply is tight and buyers are still willing to pay. The same shortage is what tenants meet in August listings, described in our Zurich lettings report.
What the next quarters are likely to do
The firm expects the index to stay roughly where it is, or to edge down. A fast improvement is unlikely while unemployment is elevated, prices are still climbing, and regions do not move together. A calmer risk score is not the same thing as a cheaper flat.