Credit Suisse Real Estate Monitor Switzerland 2. Quarter 2017

– Home ownership: single-family homes have an advantage 5

Price growth in the residential property segment has come to a standstill after 14 years of increases. Prices are expected to stagnate over the next few quarters. Single-family homes are likely to be ahead of condominiums in terms of price growth. This is mainly because the demand for property is shifting away from the centers, which have become unaffordable, and because the land value of single-family homes is generally higher.

– Digitalization: real estate goes mobile 8

Real estate marketing is reinventing itself with the use of augmented and virtual reality. The technologies should make the market more efficient and reduce the risk for real estate developers.

– Rental apartments: Reference interest rate: Low for long 9

On 1. On June 1, 2017, the Federal Housing Office announced a reduction in the reference interest rate from 1.75% to 1.50%. It is now likely to remain at this record low level for some time.

– Real estate valuation: reflecting uncertainties in the DCF 12

The discounted cash flow method (DCF) has become established in the valuation of real estate. Because the input variables used in the DCF valuation relate to the future, they must be forecast. These forecasts are therefore subject to uncertainties, which the resulting DCF real estate values take too little account of. Monte Carlo simulations can map the resulting risks.

* The publisher is: 
Burkhard Varnholt
Vice Chairman IS&P
+41 44 333 67 63
burkhard.varnholt@credit-suisse.com

Fredy Hasenmaile
Head Real Estate Economics
Tel. +41 44 333 89 17
E-mail: fredy.hasenmaile@credit-suisse.com

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