"Prices have risen sharply in many municipalities in Zurich"
Anyone who wants to buy a house or an apartment in the Canton of Zurich needs a good deal of patience, depending on the circumstances. Suzana Trifunovic, Head of the Mortgage Center Zurich-North, gives tips in our interview and says in which regions in the Canton of Zurich real estate is booming.
The demand for real estate is large in Zurich. What are the vacancy rate and price trends?
Suzana Trifunovic*: There is very little vacancy in the city of Zurich. Hardly any houses are for sale. And if they are, they are usually investment properties. Living near the center is indeed highly sought after and, accordingly, prices have soared. Prices have also risen significantly in well-connected municipalities in recent years, though we did have a small correction, when new amortization rules and restrictions on the use of pension fund capital for residential property were introduced. But this has abated in the meantime.
For which regions is this price trend occurring in particular?
Prices have risen tremendously throughout the Canton of Zurich, particularly in the city of Zurich and the lakeside municipalities on either side of Lake Zurich. The steep price rises of the past few years compared to income trends in some regions are no longer sustainable and have led to an increased market risk. Credit Suisse has responded to this trend and for some regions, such as the Pfannenstiel region, has taken measures that should protect clients against any market correction.
Younger families can no longer afford a house in the Zurich region.
Suzana Trifunovic, Head of the Mortgage Center Zurich-North at Credit Suisse
Is it just as difficult to buy a house in Winterthur as it is in Zurich?
The supply shortage is also being reflected in prices in Winterthur. But there is still a lot of potential in Winterthur. Unlike in the city of Zurich, not just apartments are in demand here, but also houses. Winterthur has several nice districts with plenty of single-family dwellings. These are popular family properties. Though you also need to have a good deal of patience here if you want to buy such a house – or you need to extend your search out into the greater Winterthur area.
Which properties are particularly sought after in the Canton of Zurich – houses or apartments?
The demand for condominiums is generally higher in the Canton of Zurich today than the demand for single-family dwellings. On the one hand, this has to do with the price of single-family dwellings. Younger families can no longer afford a house. Another factor is the work in and around the house. In many families both parents work and don't have time to look after a house and garden. Their needs are best covered in an apartment, especially as seating areas and terraces are designed generously today. The trend is amplified by the demographic shift: Older people are selling their houses and moving to condominiums, thus compounding the demand.
You said at the start that the demand for real estate in the Canton of Zurich is very high. How does this affect price negotiations?
For new buildings there is a fixed price. But existing buildings are often sold to the highest bidder in a bidding process. One thing we are seeing in many cases is clients requesting multiple financing confirmations. These buyers are trying to purchase a house, but are being outbid. Sometimes financing confirmations are also requested for varying amounts in order to have more leeway when bidding.
How important is it to request a financing confirmation in advance?
A financing confirmation is always property-dependent, even if the creditworthiness of the client is given. It is therefore issued only if a specific purchase project exists. But many clients clarify the financing parameters with us in advance in order to see what they can afford. That makes very good sense, since on this basis together with the sales documentation for a property we can issue a financing confirmation faster. It is precisely when a house is being sold in a bidding process that speed is of the essence.
Demand for ownership remains high. How do prospective buyers find a house or a condominium in Zurich?
These days a large part of the process takes place via a personal contact or a real estate agent. We are seeing that there are more and more real estate agents in the market. On the other hand, hardly anyone is selling privately any longer. There is too great a fear of asking for too low a price. Caution is required when faced with unqualified real estate agents. Otherwise, however, real estate agents are a good point of contact in order to issue a purchase order, for instance. It is also possible to be put on construction companies' prospect list directly. In general, search requests on online platforms are advisable, though you should react quickly when something is advertised.
Is it possible to find real estate bargains in the Canton of Zurich? Are there still compulsory auctions?
There are virtually no bargains any more. Except in people's circle of acquaintances or family members. There are also almost no compulsory auctions any longer. Low interest rates make it possible to finance your own home. We had just two cases of compulsory auctions at our Mortgage Center in the past six years.