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[note on Lausanne-Geneva prices added at end] Lake Geneva region, Switzerland (GenevaLunch) - The housing market in Switzerland is heading for a very soft landing, with supply reaching the "tail end of the residential construction boom" and no danger of a slowdown in housing demand in the near future, says Credit Suisse in a report on the Swiss real estate market published Tuesday.

Photo: Geneva, viewed from Pregny, with the ubiquitous crane on the right (click to view larger).

Demand will remain high despite concerns about the economy, the bank argues, thanks to continuing immigration from European Union and EFTA countries In 2008, and because Swiss households will see their income rise in real terms this year. Income and housing expenditure are closely linked, with the Swiss traditionally spending 16-18% of their income on housing.

Construction demand and new permits are falling, but only gradually: 42,000 new housing units will come onto the market in 2008. There are variations across the country, with Geneva remaining one of the tightest markets because supply has failed to keep up with demand. Overall, single family homes are reaching the "saturation" point and are on the market longer, as are apartments with four or more rooms.

In commercial real estate the country as a whole is coming out of a period of over-supply of office space, thanks to new office-based jobs. This hides strong regional differences, however, with Zurich having 4.6% of its space available and Geneva, the other main office space centre, have only 1.1% free.

Ed. note: in an article on the Credit Suisse report published Wednesday, 5 March, by the Tribune de Geneve, an economist at Credit Suisse is quoted as saying that property in the Lausanne-Geneva region is quickly snapped up and that prices in the region will remain high for a long time to come.