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Property ‘bubble’ shows early signs of deflating

A fall in the value of high end housing, particularly in hotspot areas such as Geneva and Zurich, combined with a slowdown of overall price increases across Switzerland could signal the end to a troubling property bubble in the country. The latest statistics are a cause of some relief to those who remember the 1990s Swiss housing crash that saw many people lose their homes, banks lose billions of francs and some financial institutions disappear altogether. A combination of rock bottom interest rates, rising immigration and the declining performance of other investment classes, such as bonds, saw average property prices escalate by more than a third across Switzerland over the last five years. In Geneva and Zurich the cost of buying a home shot up by as much as 70% in the same period. It is in these hotspots, fuelled by large influxes of well-heeled immigrants, that experts believe house price bubbles already exist, forcing people on more modest ... Show more

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