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Time-Varying and Regional Dynamics in Swiss Housing Markets


In light of the strong increase of house prices in Switzerland in the 2000s and early 2010s, we analyze the effects of mortgage rate shocks, changes in housing demand & supply and business cycle conditions on house prices for the time period 1982–2013. We study intertemporal effects by employing Bayesian timevarying coefficients vector autoregressions (TVC-BVAR), regional effects by using regional BVARs and heterogeneity in housing markets by looking at housing segments. 50 % of house price variations can be explained by housing demand & supply. The response of house prices to mortgage rate shocks weakened after the 1990s real estate crisis and remained constant thereafter. However, owneroccupied apartment prices became again more sensitive to mortgage rate shocks during the recent house price boom. Regional effects are especially prevalent for regions Zurich and Geneva.


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Corresponding author

Correspondence to Dirk Drechsel.

Additional information

We are grateful to Klaus Abberger, Samad Sarferaz, Jan-Egbert Sturm and Cédric Tille for valuable comments and discussions. We further thank Florian Eckert for valuable research assistance and seminar participants at ETH Zurich and the Geneva Graduate Institute of International and Development Studies as well as two anonymous referees for helpful comments.

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Drechsel, D., Funk, A.K. Time-Varying and Regional Dynamics in Swiss Housing Markets. Swiss J Economics Statistics 153, 37–72 (2017).

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  • C32
  • R21
  • R31


  • Switzerland
  • house prices
  • time-varying BVAR