The total mortgage market in Switzerland grew 3.4 percent last year, which translates into an increase by 34.6 billion Swiss francs ($34.4 billion). The business was worth 1.06 trillion francs in total. The rate of growth doesn’t suggest that the market is overheating, says Heitmann: «The increase in prices has clearly slowed down in recent years and even UBS, which always warned about a bubble, doesn’t see one coming up.»
Therefore, more may still be in the pipeline: «There’s no other country with such a low level of home ownership as Switzerland.» With interest rates at record lows and rents paid for apartments rising steadily, it was still worth buying your own, Heitmann added.
If you can afford, that is. Heitmann believes the business is regulated too heavily: «Normal wage earners stand almost no chance to get a mortgage.» With the stringent rules applied to mortgage selling, segments of the population are excluded from the market.
Availability of Comparison Services
A second trend that has become discernible in recent years is the availability and use of online comparison services, a trend that Heitmann says will prevail in 2019.
Currently, three quarters of all mortgages are agreed with the borrower’s principal bank, without checking available alternatives on comparison service websites. Five years ago, the share of prospective homeowners looking at such sites was at 5 percent.
Gradually, larger providers are eager to be part of the comparison business, as for instance was Postfinance. This is probably a reflection of customer demand for more transparency in the market, says Heitmann.
The relative strength of mortgage providers has fundamentally changed over the past years, the study showed (see below in German language).
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