Commercial spaces
The weakening export economy and worsening location conditions in relation to the EU are reducing the demand for commercial and industrial space. However, as many properties are owned by the companies concerned, the impact on rents remains moderate.
Residential property
Private property is also suffering from the crisis. Weaker employment growth is reducing immigration and purchasing power, so price increases are slightly more moderate. Overall, the effect remains limited as long as the pharmaceutical and chemical industries manage to maintain their profitability at a good level.
Interest rates are expected to fall further
A slight fall in interest rates will have a stabilising effect and reduce negative influences. At the same time, national real estate orientation is proving to be a double-edged sword: it protects against the direct effects of tariffs, but makes the Swiss economy more vulnerable if it suffers more than the EU. Moreover, banks are not passing on interest rate cuts to their customers in the same way.
Inflation and construction prices
The impact on inflation and construction prices is slight, as cost increases are offset by oversupply and the economic slowdown. Regionally, it is mainly industrial and agricultural communities that are affected, while financial centres and tourist regions are largely spared.
In short, only a slight correction in the real estate market
Overall, according to Wüest Partner, the Swiss real estate market is only reacting moderately to the rates. Market mechanisms and the slight fall in interest rates are having a stabilising effect, so the impact remains moderate overall.
