Markus Waeber has been analysing the Swiss property market since 2006. As a sell-side equity research analyst at Zürcher Kantonalbank, he significantly expanded coverage of Swiss property shares and property funds. Since 2016, he has built up investor relations and communications at Swiss Prime Site, the largest listed Swiss property company, with an increased focus on sustainability/ESG. Since spring 2023, he is Head of Indirect Real Estate Advisory & Intelligence at Bank Julius Baer & Co. Ltd, where he complements the holistic real estate offering with services and advice for real estate investments. He also publishes the quarterly property market report for Switzerland and Germany and is a well-known opinion leader in the property real estate sector. He holds a Master’s degree in Business Administration (lic. oec. HSG) from the University of St. Gallen.

Markus, what do you think was the most important event that shaped the Swiss property market in the recent past?

The reduction of the SNB policy rate by 25 basis points to 1.0% on 26 September 2024 was generally expected. However, the SNB’s statement that further interest rate cuts may be necessary in the coming quarters in order to ensure price stability in the medium term came as a surprise. As a result, our economists have adjusted their interest rate expectations and we now expect two further interest rate cuts of 25 basis points each in December 2024 and March 2025 to a level of 0.5%.

What impact do you expect this new starting position to have on the property market?

We have already seen a revitalising effect on demand for high-end residential property following the two interest rate cuts in the first half of 2024. The new interest rate scenario is likely to reinforce this trend, as financing costs will tend to fall further and the relative attractiveness of owner-occupied property will continue to increase in comparison to the disproportionately rising rents on offer.

How do you assess the market for investment properties, especially multi-family houses?

With net yields of 2.4%, top multi-family houses generate an attractive yield spread of around 200 basis points compared to 10-year government bonds. This is an absolute peak level within Europe. Despite a possible reduction in the reference interest rate in 2025, we therefore expect solid demand for apartment buildings and renewed value increases in this segment. This could also trigger NAV increases in indirect real estate investments that focus on residential property.

Further interesting information can be found in the Julius Baer Group’s  Property Market Report Switzerland from Q4 2024