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REAL ESTATE

Swedish realtors predict drop in house prices

A survey, carried out by the Association of Swedish Real Estate Agents (Mäklarsamfundet) on 1,800 realtors countrywide, shows that 54 percent believe that small houses prices will fall in the near future.

”The stress is on slightly decreasing prices in the prognosis for development up until February 2012. However, compared to the last prognosis, the outlook is more optimistic,” said Claudia Wörmann, head of analyses at the association.

According to Wörmann, the estate agents make similar predictions for tenant-owner apartments.

One of the reasons is that banks are being more restrictive with their money and that it has become much more difficult to qualify for a mortgage.

Bleak news reports about the state of the economy, coupled with the banks’ more restrictive measures are also contributing to both buyers and sellers feeling worried and taking a step back today, according to Wörmann.

At the same time, real estate agents have noted that those who were active on the property market in the 90s tend to be more laid back about the current situation

”Many realtors are saying that there is a tendency within this group to want to pay off more of their mortgage debts, than those who don’t remember the 90s. Also, they are more reluctant to borrow more than they need. They aren’t as worried about the state of the market either, partly because the current interest rates are low compared to back then,” said Wörmann.

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REAL ESTATE

Zurich has one of the world’s ‘riskiest’ housing markets

The risk of a housing bubble is on the rise in Switzerland’s largest city Zurich, according to a new study.

Zurich has one of the world’s 'riskiest' housing markets
Zurich is at risk of a housing bubble, study says. Photo by AFP

This is the first year that Zurich joined the ranks of cities at risk of a housing bubble since UBS bank started its annual analysis in 2014.

The Global Real Estate Bubble Index, which surveyed 25 major cities around the world, puts the housing market into long-term perspective and is designed to track the risk of property price bubbles in those locations.

Housing bubbles are periods characterized by high demand, low supply, and inflated prices.

According to the analysis, “Zurich recorded the strongest price growth rate of all Swiss economic regions in the last decade. Its housing market has been characterized by a relatively fast supply expansion and benefited from increasing demand.

“The owner-occupied market has dried up, while the coronavirus crisis has hardly left any traces on it. In fact, housing located near Zurich's city center benefited from increasing demand.

“The high willingness to pay reflects both expectations that prices will further increase and sustained investment demand. In line with these developments, the city now joins the bubble risk ranks.

READ MORE: Buying property versus renting in Switzerland: What is actually cheaper?

Housing in Switzerland’s second-largest city, Geneva, is also notoriously expensive, but Zurich ranks higher in terms of real estate prices, the Index shows.

“Geneva’s housing market has recovered from losses incurred during the period between 2013 and 2016. Adding to this, low mortgage rates keep home-ownership appealing in light of inflated market rents and the city benefits from its international standing, while continuing to attract foreign nationals despite affordability constraints”, UBS said.

While Zurich figures in the seventh place in the Index, it is topped by even ‘riskier’ European cities like Munich, Frankfurt, Paris, and Amsterdam.

“The Eurozone stands out as the region with the most overheated housing markets”, the study found.

London, Stockholm and Moscow are classified as ‘overvalued’ but not at risk of a bubble, while Madrid is ‘fair-valued’.
 

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