According to the Swiss National Bank, the prices of apartments in the country are overstated.
"Current apartment prices are about 15 to 40% higher than levels that can be explained by fundamental factors," the central bank's annual report on financial stability says. However, it is clarified that "when interpreting these figures, it is important to keep in mind that they do not reflect all the supply and demand factors that may affect the residential real estate market."
The increase in the key interest rate that took place last year had a much smaller impact on the real estate market than similar actions by the central bank in other countries, and, according to the report, "in general, it was moderate". Nevertheless, the Swiss National Bank has warned of a possible price correction. "With the increase in mortgage interest rates, the probability of a decline in residential real estate prices has increased," the report says. "This applies to both the commercial and residential real estate segment," in the latter, prices have actually already decreased somewhat.
Source: Bloomberg
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