BERN: The UBS Swiss Real Estate Bubble Index rose significantly in the second quarter of 2015 and now stands at 1.37 index points.
The report says that the housing market is still caught up in an investment property boom. House prices and private household mortgages went up disproportionately relative to Switzerland’s weak economy. UBS Swiss real estate index chartThe Index rose 0.10 points to 1.37 in the second quarter of 2015 pushing it further into the risk zone – a reading above 1.00 is considered risky.
The general leveling off of mortgage debt and home prices that took place in 2014 gave way to increases in the first half of 2015. Private household mortgage volume increased by 3.5% year-on-year and home prices went up 2%. While these increases might seem moderate, they are considered high given the context of shrinking economic output and declining consumer prices.