Real estate prices and monetary policy

Jean-Pierre Roth, Chairman of the Governing Board

Swiss Home Owners' Association, Zurich, 30 November 2002, 30.11.2002

Concurrently with the collapse of share prices, real estate prices have moved up steeply in a number of countries. Some observers already fear that now that the bubble in the stock market has burst, a new bubble is emerging in the real estate market.

The question as to whether a central bank should counter price fluctuations of property assets (shares, real estate, etc.) is a controversial one. The Swiss National Bank holds the view that it should only concern itself with such prices in so far as these will influence future consumer price increases. The rise in Swiss real estate prices observed in recent years does not justify any monetary policy measures at present.