The impact of the Coronavirus not likely to go to the Swiss economy and on the local real estate market unscathed. Economists at UBS expect that there is a similarly severe recession in 2009 in part to substantial Value adjustments in real estate. However, there are significant differences in the various types of real estate.
in Principle, applies to the real estate market, according to UBS, that it differs significantly from the Situation in the year 2009. At the time, the massive interest sparked by the Swiss national Bank (SNB) and an increase in immigration from cuts, a strong surge in demand for real estate. Both of these factors are not likely to rush to the market, this time again to help. Because the interest level can’t yield, according to UBS once again as strong as in the times of financial crisis and the population growth had halved since then.
Lower interest rates are likely to own the home market first,
support the long-term interest rates Should be set over a longer period of time between -0.75 and -1,00 percent, and the employment and the economy does not practice massive decline, which would lower funding costs support the broad home market in an initial Phase, however, even. Thus, on average, over the whole real estate market is probably only moderate price declines were to be expected.
In the luxury segment, where demand is more closely linked to the development of the highest income and wealth, oppressed, however, will moderate price declines in the volume of transactions. Here it is expected, therefore, in the case of a strong recession, a noticeable decline in the liquidity of the market.
In the case of investment properties like multi-family homes are likely to remain, according to the UBS experts, the cash flows are relatively stable. Lower interest rates support the ratings. The Coronavirus will lead to a prolonged economic downturn, the vacancy rates would continue to rise, according to the analysis.
office space and commercial real estate more
concerned, it Should come in the Wake of the slowdown to a decline in employment, should, in addition, the office space higher have empty stands. Because the construction activity was relatively constant, so the UBS to continue. In addition, the highly cyclic Shared-Office-generating business is now a significant land portion of the demand for office. A rise in the risk premium and falling Rents would have significant value adjustments to the sequence.
pressure is likely to be for the sale of land. Because even with the good economy, sales in Shopping centers remained unchanged according to UBS, in the best case on the spot. In a recession scenario, with stagnant household spending and a further appreciation of the Swiss franc is expected to yield revenues of up to 5 percent.
(cpm/sda)
Created: 09.03.2020, 11:01 PM
