Mr. and Mrs. Swiss have become more reluctant to buy real estate in the first half of 2023. Meanwhile, prices vary widely by region. Insurance companies have increased the volume of mortgages brokered.

Purchase prices for apartments and single-family houses in Switzerland have risen only slightly since January 1, 2023. Condominiums became 0.9% more expensive in the last half-year, but single-family houses only 0.1%. Prices in this category even declined by 0.3% in the first quarter of 2023, as reported by mortgage and real estate specialist MoneyPark.

Prices for single-family homes fell in German-speaking Switzerland

Comparing French-speaking Switzerland with German-speaking Switzerland, prices for single-family homes in both regions fell slightly in the first quarter; those in French-speaking Switzerland by 1.0%, those in German-speaking Switzerland by 0.4%. However, the market in western Switzerland recovered in the second quarter, with prices rising by 2.6%. In German-speaking Switzerland, however, prices fell by a further 0.2%.

Condominiums have risen more sharply in western Switzerland

Residential property prices rose in both German-speaking and French-speaking Switzerland in the first half of the year. At +1.1%, French-speaking Switzerland was ahead of German-speaking Switzerland with +0.6%. German-speaking Switzerland even suffered a minimal decline of 0.1% in the first quarter, but was able to reverse the downward trend in the second quarter.

Saron share in mortgages has declined in both parts of the country

As a result of the key interest rate increases by the Swiss National Bank (SNB) in December 2022 and March 2023, the price difference between Saron and fixed-rate mortgages has narrowed. Accordingly, the experts at MoneyPark saw significantly less demand for Saron mortgages in the first half of 2023 in both German-speaking Switzerland (-19%) and French-speaking Switzerland (-43%) and more demand again for 10-year fixed-rate mortgages and shorter maturities.

Fixed-rate mortgages likely to gain further ground

The latest interest rate step by the SNB in June 2023 and a possible further interest rate step in September should further reduce the attractiveness of Saron mortgages and give more growth to medium- and long-term fixed mortgages, for which a further interest rate step is already priced in, the experts at MoneyPark are convinced. The interest rate differences between the maturities are currently so small or, depending on the provider, hardly exist, that probably more 10-year and longer maturities are chosen.

Insurance companies gain in both parts of the country

Insurance companies increased their share of brokered mortgage volume in both German-speaking Switzerland (+20%) and French-speaking Switzerland (+5%), reaching their highest share since the first half of 2021 in French-speaking Switzerland. Pension funds also increased their share slightly in both parts of the country, while banks lost ground in both regions.

Fewer Saron also means fewer banks

The decrease in Saron mortgages by 26% also decreased the share in the volume brokered by banks. They have lost 4% of their share, but remain at a high 72%. Insurance companies had reduced their mortgage volume by around 3% in 2022 and are now playing catch-up with attractive conditions, followed by pension funds.

The MoneyPark data are based on mortgages brokered by MoneyPark for owner-occupied residential property in German- and French-speaking Switzerland in the corresponding period under review. Financing for investment properties was excluded from the data. The benchmark rate mentioned is calculated from the showcase interest rate of more than 150 banks, insurance companies and pension funds.