Real estate is the oldest investment in the world and there is a lot we can learn from this.

This article will focus on the last 30 years of the real estate market. To do this, we compare the driving factors and prices in the property market in the UK and Switzerland between 1990 and 2022.

How did property prices compare?

The British property market started the 1990s directly with a recession and with this property prices fell by more than 10% from 1990 to 1993. In 1993, the average house in the UK cost £51,210.

Prices in the UK property market did not recover until 1996, when interest rates fell to a historic low of 5.5%. This provided the opportunity for many people who previously could not afford to own a home to fulfil their dream.

This led to a huge rise in property prices, so that by the early 2000s the average house price in the UK had cracked £100,000. This was followed by 2006, which saw an average price increase of 14% and forced many people out of the property market. The number of renters compared to owners increased dramatically that year.

In 2008, the housing bubble followed, which we covered in detail in . Within a year, house prices fell by an average of 15%, with the average house price at £168,973.

The next few years were marked by government intervention to stabilise the property market, so that by 2012 it had recovered. Thereafter, there were no exceptional price fluctuations in the UK property market until the Coronavirus crisis. The Coronavirus crisis also led to historically strong price increases.

The Swiss property market was subject to fewer fluctuations and was characterised by enormous stability in the last 30 years and after a strong crash. The years between 1990 and 2000 were also bumpy in the Swiss real estate market and led to a loss in value of real estate of between 30% and 40%. Swiss banks had to write off about CHF 42 billion during this period.

The years between 2000 and 2020 are characterised by admirable stability and steady growth. Even the real estate bubble in 2008 had hardly any noticeable impact on the Swiss real estate market. Only Coronavirus crisis led to a sharp rise in prices, although this is already beginning to correct itself.

What were the driving factors?

 There are many driving factors that have led to fluctuations in the real estate market. In both countries, inflation, as well as the ever-increasing demand for homes, are the strongest factors. The influence of inflation can be a little more difficult to understand, which is why we have already explained this in detail in our blog about inflation.

Not to be underestimated, however, is the influence of government, which has been particularly noticeable in the UK in the years following the financial crisis. For example, certain property loans were guaranteed by the British government from 2012 onwards, which made it much easier to buy a home. The Swiss government did not intervene as much in the real estate market, as the impact of the financial crisis on the Swiss real estate market was very small.