Starker Franken und tiefe Zinsen: Wohin steuert der schweizerische Immobilienmarkt?

Peter Stalder ()
Additional contact information
Peter Stalder: KOF Swiss Economic Institute, ETH Zurich, Switzerland, http://www.kof.ethz.ch

KOF Analysen, 2015, vol. 9, issue 4, 45-66

Abstract: The European sovereign debt crisis has put Swiss monetary policy in situation with a strong currency and ultra-low interest rates. After the Swiss National Bank (SNB) abandoned the minimum exchange rate regime, the Swiss franc has further appreciated and interest rates declined partly into negative territory. Will low interest rates fuel a housing boom, or will the dampening impact of the appreciation on economic activity have the opposite effect? The present study assesses this question on basis of a stock-flow model of the housing market. In principal, this model allows for the possibility of a boom-bust cycle in that increasing housing demand and optimistic price expectations interact in a self-enforcing process, until an excessive price level initiates a downward spiral. The econometric analysis supports this view but also shows that the turnaround takes place smoothly. Hence, a crash on the housing market can only occur in combination with an abrupt interest rate hike. Such a situation could materialize if the problems in the Euro area ebb away quickly, giving rise to a pronounced weakening of the Swiss franc. Such a development is unlikely, though. In a plausible forecast scenario, the SNB raises interest rates cautiously, steering the housing market to a soft landing.

Keywords: Monetary Policy; Housing Bubble; Stock-Flow Dynamics (search for similar items in EconPapers)
JEL-codes: E31 E37 E52 E58 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.3929/ethz-a-005427569 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kof:anskof:v:9:y:2015:i:4:p:45-66

Access Statistics for this article

More articles in KOF Analysen from KOF Swiss Economic Institute, ETH Zurich Contact information at EDIRC.
Bibliographic data for series maintained by ().