Rudolf Martys Präsentation an der Urban Economics Conference, Nov 7 - Nov 11 2017 in Vancouver: "The impact of mortgage rates on expected real estate returns and rent growth in Switzerland"

The study investigates whether the rent-price ratio of the Swiss housing
market has predictive power with respect to future rent growth and housing
returns during the period of 1970 to 2016. It is found the rent-price ratio has indeed
significant forecasting power for all but one forecast horizons. However, the mortgage rate as an additional potential predictor is found to have a significant and strongly negative impact on future real rent growth besides the rent-price ratio. Possible explanations for this surprising finding could be money illusion of buyers
of real estate as they confuse nominal with real interest rates or market frictions.