Investors' capital allocation into office and residential markets in ...

why the supply can be absorbed quickly and there is construction going on, satisfying the
demand. Moreover, Swiss property market benefits from the laws on ownership of the
properties by foreigners, which favours the inflow of foreign investments in the country.
The new funds are opened which are specified by special regions or type of property in
the country. The treaty between Switzerland and European Union on free movement of
people influenced severely residential market in the country. There is an increase in rents
in Swiss residential market and lack of apartments with low rents.
In Swedish property investment market in the first half (H1) 2008, domestic and Nordic
investors have been quite active. These investors were affected less by the financial
crisis. To refurbish the property and deliver it to the market used to be a common thing
for Switzerland while for Sweden the refurbishment of the properties is a recent way of
delivering high quality properties to the market. Both Sweden and Switzerland used to
have low yields and low interest rates. Nowadays, yields and interest rates increased
severely in both countries caused by the credit crunch.
Despite of the better liquidity of real estate as an asset, still the investors are quite careful
to have it in their portfolio. It takes time to enter the real estate market and to leave it,
once it is necessary.
This paper is an attempt to get an overview on the current situation in real estate markets
in comparatively similar countries. The material can be used for further research in the
development of the residential and office markets, particularly risk premium on both
markets in Sweden and Switzerland.
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