SWISS housing prices rose to their highest level in at least six years – stoking concern that the market is becoming overheated.

The government’s residential property price index increased to 116.1 in the third quarter, Switzerland’s statistics agency said on Tuesday (Nov 7). That’s 1.3 per cent more than a year ago and the highest reading since the data series began in 2017.

In recent years, the price growth of condominiums was slightly less pronounced than that of single-family homes.

Hiring by multinationals such as Alphabet has propelled house prices in Zurich past levels in Paris and London – even as the Swiss National Bank has significantly raised interest rates. Local supply squeezes are also keeping a floor under prices.

Such trends prompted SNB president Thomas Jordan to warn last week that house prices may drop – echoing earlier concerns that real estate may be overvalued.

“It will be very important to see what happens with rents,” he said in Zurich. “We would not be completely surprised if we see some reactions of prices.”

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Switzerland’s statistics agency calculates the index every quarter based on about 7,000 open-market transactions from all regions of the country. BLOOMBERG