Switzerland's property market has continued its unbroken streak of nine-consecutive years of capital appreciation, with 1.4% in 2010, according to the IPD Switzerland Annual Property Index.

Switzerland, Europe's most resilient market during the global financial crisis in 2008 and 2009, delivered an improved annual total return of 6.1% last year, 60 basis points ahead of 2009's 5.5% and matching the return of 2008.

The principal driver of capital growth was rental growth across each of the four main sectors, with modest yield compression. Over the year, rental growth was 1.3%, while yields compressed by 10 basis points to 5.9%.

The best and worst performing parts of the market were separated by 180 basis points, with the Retail sector topping the table, with annual returns of 6.8%, while the Industrial sector returned 5.0%. Overall, the commercial sectors (Retail and Offices) performed better than the market with Residentials posting a below-average performance.

The Swiss property market has a track record of low volatility. This is primarily determined by the large weight of the residential sector in the index coupled with limited asset supply and a dominant stock ownership, with local pension and insurance funds and other institutional investors taking long-term positions in the market and creating market stability.