With the turnaround in interest rates, the times seem to be coming to an end in which there was only one direction for real estate prices: upwards. For investors, real estate nevertheless remains an attractive investment – especially if it is actively managed. Lukas Hanimann of Zurich Invest is convinced of that.
Swiss economy proves robust in 2022 despite global problems. Unemployment rate of 2% and inflation at 2.5% are at a low level. In 2023, the SNB expects inflation of 0 to 2%. The stable, in part slightly deflationary environment since 2010 is thus abandoned. The SNB therefore raised interest rates again for the first time to -0.25%. Further increases are under consideration.
These factors and the uncertainties on the financial market have recently led to a rapid and volatile increase in 10-year federal bonds. In August, interest rates on 10-year federal bonds were 0.70%. In June they were still at 1.45%, in January at 0%. Increases are also being seen in the interest rates of fixed-rate mortgages. Only SARON remained in negative territory at -0.20%. The offer prices of real estate, on the other hand, remained stable, in some cases even increased slightly. Thus, the spread, i.e. the risk premium, of real estate investments compared with risk-free government bonds decreased.