Price expectations have risen considerably year over year for all location categories.
This increase was greatest for medium-sized centers, which climbed 37.3 points to +25.0 points. Significant upside potential is still being attributed to prices for central locations, which came in at +91.0 points in the Price Expectation Index. At -69.8 points, price expectations for peripheral locations remain in clearly negative territory, even despite an increase of 31.0 points.
Assessments have been following precisely the same pattern since the sresi was first compiled in 2012, with this even more evident in the trend for location preferences. Rising prices are being forecast for six of Switzerland’s eight economic centers, with respondents expecting the biggest increases in Zurich (+84.8 points) and Geneva (+59.6 points). Declining property prices are anticipated at the investment locations of St. Gallen (-45.7 points) and Lugano (-41.6 points).
This also shows that the sresi is based on participants’ qualitative assessments since St. Gallen, in particular, has been reporting upward pressure on transaction prices for the past few years, regardless of how market players assess the prices.
Of those surveyed, 59 percent indicated a preference for investments in residential properties, while this same preference was expressed by nearly three quarters of the pension fund representatives who took part in the survey. With that in mind, it comes as no surprise that the Price Expectation Index for residential properties shot up again to +56.4 points, even despite the fact that it had dropped to +18.7 points the year before, its lowest level since the survey was first conducted. Market players seem to have come to terms with the whole issue of overproduction, which appeared on the real estate industry’s radar just over a year ago.
Assessments on the availability of adequate investment opportunities for office space have continued to decline and are now just slightly negative at -15.1 points. For the first time in the survey’s history, price expectations for the office segment are in positive territory at a stable +2.1 points. The price index for office space, which shot up by 53.3 points, boasts the strongest gain of all the sub-indices. That probably isn’t only due to positive reporting on successful rental activities and a reduction in vacancies, but also to the fact that the offerings in the office use category have been realigned to better suit users’ changed requirements and that, in turn, has shifted investors’ focus back to this category.