Swiss property market closer to overheating: UBS

[ZURICH] Switzerland's property market is at greater risk of overheating, raising the question as to whether the authorities have done enough to curtail the boom. The UBS Swiss Real Estate Bubble Index rose to 1.23 points in the fourth quarter from 1.2 points in the third, according to a statement from UBS AG yesterday. A reading above 2 indicates a bubble.

The Swiss National Bank's policy of zero rates, in place since August 2011, has kept down the cost of taking out a mortgage. Coupled with high immigration from neighbouring European countries, that has fuelled a strong increase in real estate prices in Switzerland.

Growth in mortgages has exceeded that of economic output since 2009, and last year price gains of homes and apartments outstripped advances in incomes, according to the central bank.