Switzerland

Details

  • Service: Advisory, Transactions & Restructuring, Real Estate, Financial Services
  • Industry: Real Estate, Banking
  • Type: Business and industry issue, Survey report
  • Date: 5/24/2011

Real estate and mortgage market – Quo vadis?  

A KPMG study of the Swiss real estate and mortgage market shows that there are currently no price bubbles in Switzerland – in spite of some indications of regional overheating. In the medium term, however, there is potential for adjustment.
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Switzerland’s economic-geographical scope not excluding the real estate market holds many positive aspects. The economic parameters, the ever rising median income, the political stability, the exceptionally high quality of life, the secure national finances and the flexibility of the job market conditions prompting the migration balance of a highly qualified workforce, promote a positive outlook for the future real estate market. The result: high immigration levels.

 

The long existing low interest rates which in turn have raised demand for property ownership have resulted in overall higher prices. The financing in this macro-economic environment is not without risks and something that banks cannot afford to dismiss. The SNB and FINMA warn that future risks going unnoticed today in a bank’s balance sheet will only postpone risk. Banks are reminded to enforce their lending policy and to maintain their “Exception-to-Policy” business within reasonable limits.

 

The KPMG study, in cooperation with Professor Dr. Maurice Pedergnana from the Lucerne University of Applied Sciences and the industry specialists Dr. Stefan Fahrländer and Dr. Stephan Kloess, demonstrate an analysis of the forces in the cause and effect relationship of the Swiss real estate and mortgage markets. In order to evaluate the forces of the market, approximately 20 banks in the mortgage business were consulted. The results will be examined in 7 thesis.

 

Publication in German

 

Hans Stamm

Hans Stamm

Partner, Audit Financial Services

+41 58 249 34 98

Financial Services

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