The aggregated Swiss Real Estate Sentiment Index (sresi®) is a measure of the expectations of market players for developments over the next twelve months and is generated on the basis of an assessment of the economic developments and the movement of prices on the real estate investment market.
The index reflects the assessment of around 300 survey respondents who represent an investment and appraisal volume of up to CHF 300 billion. Since it was launched in 2012, the sresi has established itself as a leading qualitative indicator of forthcoming developments in the Swiss real estate investment market.
Beat Seger explains the most important findings of the 2021 study:
sresi at its highest value since its inception
At 63.7 pts., the aggregated Swiss Real Estate Sentiment Index has reached its highest value since it was launched. In other words, this more than compensated for the negative expectations from the 2020 pandemic year.
Positive economic outlook
After a significantly negative economic sentiment of -73.8 pts. for 2020 by survey participants, a noticeable recovery is expected in the following 12 months with an index reading of 63.8 pts.
Price increases expected
The index value of 63.7 pts. confirms that survey participants expect rising prices on the Swiss real estate investment market in the coming twelve months. Only 1% of the participants expect prices to fall.
When analyzing the individual segments, it becomes clear that the positive price expectations are largely driven by an expected price increase for residential real estate.
- Residential real estate: Residential real estate continues to be the market participant’s preferred Swiss real estate investment. With an index of 119.2 pts., this segment in particular is expected to see significantly rising prices. Accordingly, with an index of -137.1 pts., the survey participants find the supply of adequate investment opportunities to be scarce.
- Real estate for sale: The index for real estate for sale has been negative since the beginning of the survey. However, it has recovered from the previous year’s low of -146.8 pts. to -82.3 pts.
- Office space: Although the price expectations index for office space remains negative at -32.8 pts., it is still above the long-term average, despite widespread discussions about falling demand.
- Location: Central locations are expected to offer a considerable price potential of 109.8 pts. which is attributed to central locations. However, expectations for mid-sized centers and agglomerations are also clearly positive at 55.4 pts., the highest level since the survey’s inception. Forecasts for price developments in peripheral locations remain negative at -32.4 pts. but are clearly higher than in previous years.
ESG – Forms of Work – Digitalization
In addition to the sresi® we also do deep dives on certain topics each year with the help of surveys. The present anniversary edition focuses on spontaneous opinions on ten current trends.
For more than half of the survey participants, ESG issues (environmental, social and good corporate governance) are already part of their investment decisions. Of these, 38% even think that ESG aspects are underestimated as they will lead to a clear segmentation with winners and losers in the market.
Also, the awareness of digitalization trends has increased further. The respondents believe that artificial intelligence in particular will have a major impact on the planning, construction and operation of real estate and lead to structural changes. More than half expect autonomous driving to become a reality, but without a major impact on the real estate market. The opinion on the tokenization on the blockchain is divided, ranging from mere hype to a real game changer.
Also in the coming year, COVID-19 will continue to be relevant. Only 12% of survey participants believe that COVID-19 will no longer be a relevant issue in 2022.
Higher interest rates or strong inflationary trends are not expected in the medium term.
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