Switzerland real estate market - Changes in progress

The first measure adopted in February 2013 by the government, to fight against the rising prices has been the activation of countercyclical policies. It was aimed to enable a better withstand risk related to credit increase; reduce high mortgages and property prices for the whole economy and the banking sector. The other measures, which entered into force gradually until the beginning of 2013 to reduce risks in Swiss real estate market as well as in the mortgage issues increased the strength of banks.

The risk of a further increase is minimal. The legislation does not allow the SNB to ask the Federal Council an increase of 2.5%. It even takes into consideration lower prices. This drop in prices could be a result of reduced credits or high inflation. The current situation gave rise to discussions between stakeholders. In our case we talk about the Department of Finance, the Swiss Financial Markets Authority (FINMA) and the banking sector. These discussions include strengthening of self directives.

The actions taken by the Federal Council are unpleasant but necessary. There is no other alternative, according to the director of the Association of Landowners (HEV Schweiz) Ansgar Gmür. He believes that everything must be done to prevent a housing bubble. He says ‘’ in principle, we are not happy when the Federal Council operates on the real estate market, but given the housing overheat, it is a right decision’’.

The organization (HEV Schweiz) is also aware that a single measure will have no effect so it remains only to accept the package of measures decided by the Federal Council and the banks that will act more effectively against real estate overheating. Pierre Zwahlen, deputy general secretary of the Swiss association of tenants (Asloca) states that the decision of the Federal Council "is justified due the real estate situation concern." He notices existing gaps, but hopes anyway that the government's decision will give the opportunity to "stabilize somewhat the rents in Switzerland and to prevent mortgage rates increase".