COVID-19 hit the World, and it had worse long term effects than anyone would have ever imagined. Due to this, almost the entire population shifted to work from home settings. Therefore, this changed the World order and had significant consequences on the Real Estate industry. While many were speculating that this may be a significant pause to urbanisation. It is more likely to be slow-paced in central Swiss cities. Before the pandemic, people would continuously buy or sell the real estate property in Switzerland. However, the Swiss real estate market analysis of 2022 has proven that the demand behaviour has severely changed in the past two years of the pandemic.
However, the pandemic will hopefully come to an end very soon, and coronavirus won’t be as deadly as it is today. People would shift back to the original way of living in no time. The restrictions would not be as challenging as initially, and the authorities would permanently lift places with curfews and lockdowns. But studies say that the behavioural changes that have come upon due to the pandemic may not change so soon and will most probably stay in the future. These behavioural changes would include people preferring work from home settings more than work from the office. Consequently, this will increase the demand for more spacious houses. And people would move from less central locations of urban cities.
Real Estate Market In Swiss Urban Cities
Since the pandemic, people have migrated from central urban locations and found other places to call their home, which has had a positive effect. Periurban areas that are located around metropolitan locations but are not as civilised have seen the most growth. Therefore, this has led to a significant rise in the domestic migration of rural communities. Additionally, the balance of domestic migration in rural and tourist areas was more in 2020 than in the previous years. Glarus Hinterland and many Valais locations are a few such examples.
The Change In Demand For Homes For Sale
People are shifting towards demanding ownership of houses more in comparison to how it was before the pandemic hit. People have started preferring work from home setting more than work from the office. Hence, this has also led to lesser mortgage interest rates. Other factors of the demand may be the negative interest rates due to the work from the home trend. Another significant driving factor in the increase in residential property demand is the coronavirus pandemic and its effects. People have understood the significance of high-quality properties and living ecosystems which has created a powerful desire in many people to own residential property. People consider including cheaper and peripheral areas because of the growing interest in work from home settings. Hence, owning residential property has once again become more prevalent.
Is This A Pause To Urbanization?
There have been considerable changes in the Swiss real estate market after the COVID-19 pandemic hit, which significantly impacted housing decisions. For example, the immigration/emigration balance was in a better place, alongside construction activities dropping in most areas in the outskirts of central urban cities. There has been a significant drop in vacancy rates. Advertising periods have seen a big-time decrease around the periurban and tourist areas. Due to the pandemic, the divide in the urban-rural residential market has lowered a little.
Studies have shown that in the initial months of 2021, the population has seen a lower trend suddenly. The demand for urban areas, as explained above, has reduced significantly in the first year of the pandemic itself. And a similar trend was observed in the next year of the coronavirus pandemic as well. The population reduced significantly in three major urban cities of Switzerland. The balance in population of the people living in Switzerland, especially in the urban locations, has worsened.
Many people speculate if the COVID-19 pandemic can bring a major pause to the urbanisation in Switzerland. However, it is still very unpredictable. It is not appropriate to vaguely respond to this speculation without real-time data. Urban cities would remain the lifelines considering the economic, social and cultural ecosystems they possess. Despite the consequences and little data we have presently, people won’t stop wanting to have a livelihood in urban cities. The majority of the people who know the vast and diverse culture amongst ten thousand other things that urban cities have to offer still live in urban locations. Consequently, urbanisation cannot stop permanently even if the speed is slower than before. An impactful factor of this could be the immigration of non-swiss citizens who will keep migrating to the urban cities of Switzerland to experience the excellent quality of life in Switzerland.
This article is a short guide explaining Switzerland’s real estate market analysis in 2022 and how the housing trends have changed due to the pandemic.