Turnaround in interest rates causes real estate bubble to burst

Zurich The turnaround in interest rates should bring the real estate boom to a halt. This is the assumption of the experts at the major Swiss bank UBS in a study presented on Wednesday. Accordingly, the prices in many metropolises are at a very high level and increased even further in the first half of 2022. But because of the increased financing costs, fewer and fewer people can afford a house. Matthias Holzhey, economist on the real estate team at UBS, says: “New imbalances are emerging with the turnaround in interest rates.” If fewer and fewer buyers are able to pay the high prices, a correction is imminent – ​​the real estate bubble bursts.