Dear all,
I have searched online and tried to gather some data on how the market prices has evolved especially in last 10-20 years for apartments and independent houses in and around zurich and could not find anything that drills down to a city level. All i found was generic at the country level.
Any one has any online source where I can check this.
Also from your experience and knowledge what is the normal or expected growth rate in the property prices over the years considering the economic situation, inflation, demand and supply. your comments are appreciated.
I just came across an advert of an apartment on real estate site where the current prices is 20-25% more than the listing for similar apartment in same building in 2015. I happen to know someone living in this are an they have knowledge about the apartments original prices. The growth rate is as follows
2009 - X
2015 - 15% rise
2017 - another 25% rise compared to 2015 i.e. 35% compared to original
Is such asn apartment overpriced or this is what current market justifies.
ZKB has an index for the canton:
https://www.zkb.ch/de/pr/pk/finanzie...ndex-zwex.html 25% hike in last two years is definitely a huge overprice. Economic situation has not really changed much since 2015. But maybe the original price was on the low side to begin with?
Thanks for the link.
If I read it correctly:
2010 Q1---> 236.62
2017 Q1 ---> 296.91
which is a increase in 90 point which would be aprox. 25% increase.
Would it be correct to link to rise directly to the property prices?
l
As far as understand by comparing prices for other similar new apartments in this area around 2010-2012 The original price of the apartment was in balance or little on the higher side because of the larger living space.
25% hike for 2010-2017 is plausible, there's been a significant drop in interest rates, which made it a lot more interesting and cheaper to own.
For 2015-2017 the price growth is barely justifiable by economic factors. Interest rates are already floored by bankers' greed, inflation has been zero or even slightly negative for a short period of time, no significant increase in wages that I know of, rents are going down...
According to these stats:
https://data.snb.ch/en/topics/uvo#!/...5Z,E),D1(GS,RZ,D1(GS,RZ) )
the increase in prices comes primarily from owner-occupied and single family houses segment - greater fools have been buying, attracted by low rates and savings in rents, whereas rental apartments and multifamilty home prices are moving sideways or even down - investors with a clue aren't buying into this bubble. I'd suggest to follow the latter club. Estimate for much you can rent it out, compare it to offers for multifamily houses on the market. 4-5% gross yield might be ok, anything less is sh*t, IMHO
An anecdote, for what it's worth:
(And given how illiquid the market here is, anecdotes are all you might get to work with...)
A house and two flats in our Quartier in Steuerparadis Ausserschwyz have been on the market within the last month.
The house sold for 15% more than the owner paid in 1990.
One flat sold for 5% more than the owner paid in 2010.
One flat is still unsold, the owner is about to drop the price 200K - which will put it around that same 5% increase (since 2012).
This is a village where new luxury villas list for high 7 to 8 figures - which works against houses like those in our Quartier. Our houses are small (6.5, 200-ish m2) late 80s houses built for normal workaday families. They cannot be changed - and thus do not appeal to luxury buyers. Demand among 'normal' buyers is rather tepid so prices for our rather pedestrian houses are at present fairly flat. If you looked at an average for our village you'd see quite a skewed picture, though, thanks to the gazillionaires on the hill.
That's a very useful information. Thanks.
The expectation of 4-5% gross yield - is this a strategy to overcome the overpriced apartments?
As you pointed out rent prices slightly decreasing or no change it would be extremely difficult to fetch that much gross yield.
4-5% is merely my idea of currently going yields. I'd probably buy something at 5%.