20 August 2013 - Living

Real estate bubble or not – buy or not buy? Questions that are giving home purchasers sleepless nights. The Property Report from ETH Zurich and comparis.ch gives answers.

Those wanting to fulfil the dream of owning their own home find themselves now in a more comfortable situation than a half-year ago. The number of districts with strong signs of a real estate bubble has sunk from eleven to three. A sudden calamitous fall in prices is also not expected in the "critical" regions; researchers rather expect a gradual flattening of price increases or price stagnation.

This is shown by the Property Report published for the second time by the Chair of Entrepreneurial Risks at ETH Zurich and comparis.ch (German, French, Italian). The report is based on an analysis of over one million listings of houses and apartments that have appeared on comparis.ch since 2005.

Where to buy and where not? In other words, the Swiss property market has cooled off. So where should one buy? Lucky are those who want to live in areas that researchers have classified as "Regime change". These are the districts of Affoltern, Dietikon, Zug and Bremgarten. With the price dynamic having settled down and no sudden price drop being expected, good purchase opportunities can arise.

At this time in some other areas in Switzerland, one should buy only if absolutely necessary. This is true of the districts in the Property Report under the following categories:

• "Critical": Bülach, Baden, Dielsdorf. Here the researchers see strong signs of a real estate bubble.
• "To watch": Pfäffikon, Uster. There are also signs here of a real estate bubble, though they are not as well developed as in the "critical" areas.
• "To monitor": Areas around Zurich and Lake Zurich (Hinwil, Horgen, Höfe, March), popular residential districts in other regions (Aarau, Lenzburg, Münchwilen, Jura-Nord vaudois, Monthey) as well as Lausanne and Locarno. The researchers no longer see signs of a bubble here, though at the same time the data do not yet confirm that the situation has settled down.

Restraint can be useful in these three districts not classified as "Regime change", since it is still unclear how the price dynamic will play out over the next several months.

Maps, videos and tables A special website from comparis.ch provides all of the facts on this topic, furnished with maps, tables and video clips that illustrate the rapid price development of houses and apartments.