Everyone wants a little house in the country now

Demand has exceeded supply for some time now

Due to persistently low interest rates, demand has already exceeded supply in city centers and their agglomerations for some time. This again led to rising rental and purchase prices for properties in central locations in 2019. In Zurich in particular, the counter-trend to the previous “urban exodus” has been evident for some time. The growing interest in central residential locations meant that living space became even more of a scarce commodity and prices skyrocketed accordingly. This made them unaffordable for many. It is therefore not surprising that many people looking for a home have been extending their search to rural areas for some years now. The trend of moving from the city to the countryside in order to have more living space available or to realize the dream of owning a home was already in place before the coronavirus pandemic.

The experiences from the lockdown act as a catalyst

During the coronavirus lockdown, many city dwellers were literally trapped within their own four walls. In the countryside, on the other hand, significantly more people had the opportunity to spend time in their garden or on a large balcony. Spending time at home has certainly caused many city dwellers to rethink their priorities when choosing where to live. Whereas before the pandemic, proximity to work and the cultural offerings were of great importance, many now find the stress of density and the lack of green space a reduction in quality of life. And the realization that working from home will become increasingly important in many professions is helping to open up completely new perspectives for many people when looking for property. After all, if the inconvenience of commuting on overcrowded trains is eliminated, many people can well imagine living outside the city centers. Nevertheless, it is often the case that the search in the countryside is due to a lack of offers in the city or conurbation.

“De Föifer und s’Weggli” – Living in the city with a turnaround

It turns out that apartments and houses in the city with 4.5 to 6 rooms as well as a balcony or garden are the absolute favorites of many seekers. However, as this type of property was already very popular before the coronavirus pandemic, prices have risen continuously in recent years. The fact that large urban centers such as Zurich currently have very low vacancy rates makes the search for an apartment or home in the city even more difficult. So anyone looking for a new home in the near future will quickly expand their search radius to include more rural areas.

Will the recession bring the great standstill?

Many reports on the “coronavirus-driven exodus from cities” argue that this is a temporary phenomenon: the lockdown merely temporarily reinforced romantic notions of country life. While many experts do indeed assume this is a temporary phenomenon—as has been seen in similar historical events—many financial experts see dark clouds gathering on the “Real Estate horizon.” In their view, the predicted recession hangs over the economy like the Sword of Damocles. Although some financial experts expect retail space and luxury real estate in particular (UBS real estate study from March 2020) to undergo a massive correction in value, we are less pessimistic about the coming months. As long as stock prices continue to rise, certain sectors of the economy as well as investment assets such as gold and real estate are likely to enjoy strong demand. After all, just as likely as the negative scenarios is the scenario in which priorities shift from consumer spending to tangible assets. This scenario, combined with rising inflation, is likely to cause prices for tangible assets to skyrocket further.