Swiss real estate intact but heading into storms - Credit SuisseSwiss real estate intact but heading into storms - Credit Suisse

Swiss real estate is in a good state of health and has experienced virtually no excesses in recent years; however its are unlikely to emerge from the global financial crisis unscathed, says a recent report from Credit Suisse. The housing market is the most stable segment in the nation, and the wave of immigration into Switzerland is still having beneficial effects. Although the impact will decline from the record 2008, immigration will prevent a sharp fall-off in demand. In the commercial market however, the prospect of substantial job reductions, coupled with the end of the consumer boom, will bring a slump in demand - while the market will have to cope with an increasing supply of space for cyclical reasons. In retail, the current downsizing of existing space is set to accelerate. Although Credit Suisse does not expect office users to downsize floorspace drastically, very few companies now plan to expand accommodation. In terms of supply, construction projects reached a new peak at end-2008 just as the economy began cooling. The growing volume of space supply will thus trigger a turnaround in the vacancy rate, which has been falling for three years. The upward trend in rents, observable since 2007, will come to an end.

(For full story, log in to download 119 Property Investor Europe, published 4 May 2009)