Housing prices in the Swiss city of Zurich have risen outrageously. Google is to blame
Zurich has recently become one of the hottest housing markets in Europe, with home prices in the city surpassing those in London and Paris. As Bloomberg , this trend is due to the growing corporate presence, especially Google, in Zurich and its impact on the real estate market.
Apartment prices in Zurich's central district have risen to a near-record high of more than €18,000 per square meter. This sets the Swiss city apart from the rest of Europe, as other cities (e.g., Paris, Vienna, and Berlin) have either seen prices rise slightly or fall.
Rising interest rates usually restrain the growth of housing prices, but in the case of Zurich, the situation is different. Real estate here remains in high demand due to the constant influx of high-paying jobs and immigrants. Thus, rising demand is offsetting the impact of higher interest rates.
One of the largest employers in Zurich is Google, which has several campuses there and more than 5,000 employees from different countries. The presence of a well-known company strengthens the demand for housing. This offsets fears of job losses due to the takeover of UBS by Credit Suisse.
Rising real estate prices are raising concerns at the Swiss national bank, which has named Zurich as the city with the highest risk of a real estate bubble. This is because house prices here have risen by more than 50% in the past ten years, and they could remain static despite rising interest rates.
Also in Switzerland, where the population continues to grow and about a third of it is foreign, there is an increasing discussion about limiting population growth. Political parties are divided on the issue: the conservative Swiss People's Party insists on limiting population growth to 10 million by 2050, while the left-wing Social Democratic Party proposes other solutions, such as a settlement with companies. But for now, the question remains open.