Cash-rich migrants are sending property prices in Switzerland soaring, a new report shows.
According to the latest quarterly Swiss house price index, compiled by property consultants Fahrlaender Partne, the average price of a Swiss condominium gained 3 per cent in the three months to December 2013, compared with the previous quarter, while detached house values rose 2.1 per cent in the same period.
The index states that the rising property prices – particularly in the medium and low price sectors – are being driven by the influx of cash-rich migrants, ultra-low financing costs and solid economic growth.
However, according to Fahrlaender Partne, price gains for luxury homes are running out of steam.
Apartment values in the medium and lower price brackets gained 3 per cent from the third quarter, while prices in the luxury sector dropped 1.1 per cent, the index showed.
Mortgage rates in Switzerland have been held at ultra-low levels since August 2011, when the Swiss National Bank pared its key rate to near zero in a move to curb global investor demand for the franc, seen as a safe haven from the fiscal problems in the euro zone.
The Zurich-based central bank has warned repeatedly of the dangers of the Alpine country’s housing market overheating and, along with the Swiss financial market regulator, Finma, is monitoring developments in the market closely.
Article published 16th January 2014