Residential property in short supply in built-up areas
The pandemic has prompted a change in demand that shows no sign of abating, with people continuing to look for more living space in what tend to be predominantly rural areas. Yet this trend may not last forever. The main problem is that residential property is in short supply in built-up areas.
In terms of residential property, the coronavirus pandemic has ramped up demand for larger living spaces in what tend to be more rural locations. Analyses conducted by the consulting and research company FPRE, for example, show that residential property prices throughout Switzerland increased by 3.7 per cent overall in 2021, leading to rising prices across all regions. The Federal Office for Housing (FOH) has also indicated that demand is particularly high when it comes to larger properties with balconies, outdoor space and an extra room – the kind of properties that are more likely to be found in the countryside than in towns or cities.
RE/MAX, which has around 250 estate agents operating in Switzerland and therefore has a good understanding of the situation on the ground, has also noted a shift in demand, brought on by the pandemic, towards more spacious residences in comparatively rural settings. Yet RE/MAX believes that this boom in country living is temporary: “This is a short-term counter-trend,” says Rainer Jöhl, CEO of RE/MAX, “After all, the political focus is still on urban densification.”
“Middle class people are the ones who are suffering”
One thing that RE/MAX has noticed, however, is that property is not always being built where there is a demand for it: “Unfortunately, virtually nothing is being done to increase the supply of residential property in those very large agglomerations where it is needed the most” says Rainer Jöhl. “Big housing associations are being awarded contracts for tenements. And anything that does make it onto the property market is being snapped up by wealthy, solvent private individuals as a secure investment and then rented out. For urban residents, it is clearly a case of ‘Buy whatever you can’.”
As far as RE/MAX is concerned, this development is a problem: “The question is to what extent are the politicians aware of this issue, since middle class people – average families with no inheritance or above-average income – are the ones suffering from this policy.” says Rainer Jöhl.
Driven by the shortage of supply, low interest rates, the investment crisis and population growth, the gap between the economic viability of residential property and the prices at which properties are actually being sold is growing ever wider. This “housing bubble” has been developing for over 10 years and is only getting bigger. Rainer Jöhl fears that this situation will continue even if interest rates rise slightly. People very much value having a home of their own.
The real estate expert on your doorstep
Theoretical knowledge is not enough to successfully navigate this challenging market. The real estate experts at RE/MAX have strong local connections, so they can respond quickly and surprise their customers time and again with “insiders’ tips”. With demand being high, more and more properties across the major estate agent networks are finding new buyers – and that is the case for RE/MAX too. RE/MAX estate agents know all about local conditions on the property market and keep in close contact with the regionally organised RE/MAX offices.
Over the last five years, RE/MAX has developed into a network of high-quality estate agents. Once a year, the company hands out sales-based awards in recognition of the achievements of its network members.
The RE/MAX Collection Immobiliare a Ascona was named the best real estate office in the network in 2021, while “Team Volker Nies” from RE/MAX Immobiliare a Lugano – also based in the Ticino region – was hailed as the most successful team. The prize for the best individual estate agent in 2021 went to Thomas Wegmüller from The RE/MAX Collection Immobilien in Klosters.
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