MAS - Swiss Real Estate Markets

Question 1

Where are the most secondary residences?

Answer 1

in Zürich

Question 2

How high is the Swiss GDP?

Answer 2

800 billion

GDP per head is one of the highest worldwide

Question 3

How’s the current vacancy?
- Cond
- SFH
- Rental

Answer 3

Question 4

Why did RE value doubled?

Answer 4

because of the decrease of the yields (average location)

Question 5

How’s the evoluation of yields in top location?

Answer 5

Question 6

How’s the evolution of RE markets from 1980 to 2016?

Answer 6

Boom, doom, bust and boom
1980 - 1989: 1. Boom (speculation that prices could only go up)
1990 - 1998: Correction (inflation & oilprice shock)
1999 - 2016: 2. Boom

Question 7

What is a structural break?

Answer 7

• an unexpected shift in a time series that leads to a long-term change in trend

Question 8

What happens if interest rise with the housing costs?

Answer 8

housing costs increase as well

Question 9

What happens if interest rises with the yields expectations?

Answer 9

yields expectations increase

Question 10

What happens if housing costs increase with the demand for housing?

Answer 10

the demand for housing decreases

Question 11

Do market values of investment properties have an effect on demand for investments?

Answer 11

No, the price is not relevant, the important thing is the yield.

Question 12

What happens to supply if housing demand rises?

Answer 12

supply increases (in the short run nothing happens because supply is fixed).

Question 13

What happens if foreign GDP growth declines to the immigration?

Answer 13

immigration increases

Question 14

What happens if the domestic GDP grows with the demand for workspaces?

Answer 14

demand for workspaces increases

Question 15

What happens to the house incomes if domestic GDP decreases?

Answer 15

house incomes decreases too

Question 16

What happens if there is an increase in yield expectation to the market values?

Answer 16

market values of investment properties decrease

Question 17

Macro-location, Top Down approach

Answer 17

Question 18

Macro-location: what belongs to the Region

Answer 18

• population growth
• transport infrastructure (best in Zürich 90%, then Genf 80%, Bern 58%, Baden 40%, Lausanne 35% and Luzern 31% = accessibility to public transport)
• industry structure

Question 19

Macro-location: what belongs to the commune (Gemeinde)?

Answer 19

• population growth
• jobs
• transport infrastructure (number of jobs accessible within 30 min, private transport vs. public transport)
• taxes

Question 20

Utility function and location choice

How do HH choose a location?
How do HH choose a certain apartment?

Answer 20

Question 21

There are different segmentation of demand in construction

Answer 21

• social stratum (soziale Schicht), low to high
• Stage in life, young single, young couple - family
• Lifestyle, traditional - individualized

Question 22

Segmentation of demand: Stage in life

Answer 22

Question 23

What’s the prospective Model? And what inputs belong into the model?

Answer 23

The Prospective Model provides a long-term forecast of demand for residential and office space at the communal level, taking account of the individual commune’s hh and business structure as well as potential availability.

Question 24

What belongs to the Micro-location?

Answer 24

• neighborhood analysis

Question 25

Hedonic pricing models: What determines the utility of an apartment? What qualities of an apartment determine it's price?

Answer 25

Location - Macro - Micro - Within the building Size - Number of rooms - Floorspace/ size of plot Standard - Materials - facilities age/condition -> to construct an hedonic model information on these factors is needed + information on price

Question 26

Hedonic models by FPRE Where do they get the data? How frequent will it be uptdated? Who are the customers?

Answer 26

Data: - transaction data on 16'000 SFH and 20'000 CON - 26'000 rental contracts for apartments Update frequency: - quarterly Customers: - 1'200 users - banks, real estate agents, real estate developers

Question 27

Sustainability: What are the drawbacks of existing labels?

Answer 27

- portfolios/ Properties that are rated with different systems are almost impossible to compare - most rating systems need a lot of information that owners do not (yet) collect by default - existing labels have limited regional scope and sometimes only apply to certain types of buildings - the majority of existing labels are for-profit-systems that want to earn money -> having a property rated can be expensive

Question 28

What is REMMS?

Answer 28

REMMS = Real Estate Meta-monitoring on Sustainability - REMMS is not a label - non-profit association, members in clude Federal Office of Housing, academics, banks, investors - independent and neutral - all types of real estate - available for all types of owners - all pillars of sustainability as well as governance are rated - digital - no need for additional information - open system -> REMMS provides owners with a quick and cheap method to bench-mark their property / portfolio