The CSL Real Estate Market Report provides facts, figures and estimates on the investment, residential and office market in Switzerland and in particular in the Zurich economic region. The CSL Real Estate Market Report is based on a broad range of rents and prices, data from statistical offices and assessments by experienced market participants, economic promoters and experts. In addition, findings from expert interviews with key players in the sector are incorporated.
 
And last but not least, it also reflects the experience our employees gain in their daily work.

INVESTMENT MARKET

The key interest rate cuts by the US central bank (the Fed) and the European Central Bank (ECB) marked a change in direction and a further deferral of the anticipated rate hikes. While the Swiss National Bank (SNB) did not follow suit, holding its key interest rate at -0.75%, long-term interest rates in Switzerland have also come under massive pressure.

The real estate investment market reacted extremely sensitively to these developments. The CSL Immobilien investor survey showed that expectations of rising interest rates were replaced with anticipation of a multi-year extension in the era of low interest rates in 2019. This impacted real estate investors’ willingness to pay and yield expectations in a variety of ways. For investors such as insurance companies and pension funds, who invest in a range of asset classes and are faced with yet lower or even negative yields on bonds as well as negative interest rates on liquid assets, the motto is ‘yield over risk-free’. This perspective makes real estate investments with low yields relatively attractive while pure real estate investors generally have to strive for higher yields. 

 
"Interest rate decisions should have caused yields to harden further. In the case of prime properties, however, we are close to a level where there is actually little further room for manoeuvre and the effects have been cancelled out in the other segments by increasing market risks."
Annica Anna Pohl
Head of Investment Property, Commercial Property & Tenant Representation
"International interest rate policy has produced a variety of reactions in terms of yield expectations in the short term. For 2020, however, the vast majority of investors will be back to business as usual since they know how to navigate the low interest rate environment."
Patricia Reichelt
Head of Research & Market Analysis