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The rate of growth in the Swiss real estate market is declining, but competition between providers of financing is intense. A study that was made available to finews.com shows that a new player has established a firm foothold.

The Swiss pension funds decided years ago to invest some of their assets in real estate. The slow implementation of their decision made it possible that the involvement of the sector is showing only slowly in the statistics.

The volume of mortgages at pension funds increased 23 percent over the past six years, according to a study compiled by Moneypark, a mortgage brokerage. The study – which was made available to finews.com – also showed that 2017 was the year with the strongest growth rate (plus 17 percent), while growth in 2018 had slowed somewhat (to an estimated 7 percent).

Lack of Alternative Strategies

Pension funds still lead the growth league, despite the slowdown of the rate of expansion. Cantonal banks and Raiffeisen banks came second behind pension funds, with 4.4 percent growth each.

The rate of growth seen at pension funds is mainly due to the necessity to generate a decent return with a low risk attached, said Moneypark CEO Stefan Heitmann: «This is no longer possible with government bonds, which otherwise are very popular with pension funds.»

Furthermore, pension funds increasingly rely on partner firms for the marketing of their mortgages, something that has also tended to boost the sale of such products.

No Bobble in Sight