Real estate is an asset class of its own. Its local nature, low liquidity, and heterogeneity are just a few of its key characteristics. The new Roundup of the Swiss Finance Institute SFI provides a thorough review of today’s Swiss and international real estate market.
Academic and industry experts discuss the trends ahead: how will the pandemic redraw the lines in commercial and residential real estate? What will be the impact of interest rates on prices? How will climate change policies influence the market? And how will financial intermediaries be affected by future trends in real estate?
What about climate, pandemic, digital innovation and risks?
The real estate market has a huge potential to play in terms of curbing greenhouse gas emissions, in comparison to, for example, agriculture and forestry. “The technologies to lower greenhouse gas emissions in the real estate sector already exist”, says Professor Lorenz Küng (University della Svizzera italiana). Regarding the effect of the pandemic on real estate, Donato Scognamiglio (IAZI) says: “The residential and commercial real estate markets will likely take four to five years to come back into balance again. “ Claudio Saputelli (UBS) counts on digital innovation: “The real estate sector is a major beneficiary of the digital transformation.” But there are also risks, as mentions Stephan Lüthi (Swisscanto): “: The low interest rates, combined with falling margins across the board, could indeed tempt individual players to increase their risk-taking behavior.”
The report: Real Estate – How strong are the foundations?