The Swiss housing market could u-turn from supply gap to oversupply following new immigration curtails, said Jones Lang LaSalle.
Swiss voters narrowly backed proposals for immigration restrictions (driven by the right-wing Swiss People’s Party) on Sunday following concerns of the ‘erosion’ of Swiss culture by foreigners, who currently make up around 25% of the country’s 8million population.
Jones Lang LaSalle has warned of “adverse consequences” for real estate prices as a result of the new laws. The company estimates a current gap in supply and demand of around 25,000 units – but they say that the cap is closing, and forecast that high housing production will continue in 2014 and 2015.
This may lead to oversupply in the market as the number of new households decreases, JLL said. It pointed to similar circumstances in the 70s and 90s which led to dramatically increased rents and subsequent devaluation of property, saying that caution must be used to avoid similar problems – and a large, abrupt decrease in the amount of foreign immigrants should be prevented.
Ministers across the EU have spoken out against immigration curtails in Switzerland, with German Foreign Minister Frank-Walter Steinmeir telling reporters that, “Switzerland must realize that cherry-picking with the EU is not a long-term strategy.”
By Francine Carrel, International Property Reporter, OPP