In the first quarter of 2025, real estate prices in Switzerland continued their slight increase: +0.4 % for apartments and +0.3 % for individual houses.
Par jonas wiesel, co-foundateur de realadvisor
Real estate prices slightly increase
In the first quarter of 2025, real estate prices in Switzerland continued their slight increase: +0.4 % for apartments and +0.3 % for individual houses. Despite attractive mortgage rates, the number of transactions remains historically low, slowed down by strict financing conditions and low activity in new construction.
Price growth in the majority of regions
Among the big cities, Zug and Schaffhouse display the highest quarterly increase in the affair prices (+1.8%each), followed by Saint-Gall (+1.5%), Lucerne (+1.2%) and Winterthour (+1.2%). For individual houses, Schaffhouse (+1.8%), Zug (+1.3%), Saint-Gall (+1.2%) and Winterthour (+1.1%) record the most marked increases.
Conversely, Lugano displays the most important drops: -2.2% for apartments and -1.7% for houses. On the Lake Geneva Arc, Geneva and Lausanne, prices remained relatively stable: slight increase for apartments ( +0.1% in Geneva and +0.2% in Lausanne) and slight decrease for individual houses (-0.3% in Geneva and -0.1% in Lausanne).
At the cantonal level, Zug also dominates with quarterly growth of +1.9% for apartments and +1.3% for individual houses. SchaffHouse ( +1.5%apartments, +1.6%houses), Lucerne ( +1.4%, +0.7%) and Appenzell Rhodes-Etterers ( +1.2%, +1.4%) follow. On the other hand, Ticino undergoes a marked drop (-2.1% apartments, -1.9% houses). The Jura, Graubünden and certain regions of Basel also experience a decline due to low demand and persistent structural challenges.
Throughout the country, the prices of apartments have slightly exceeded those of individual houses ( +0.4% against +0.3%) in the last three months. However, this gap has reduced compared to the last twelve months (+2.2 % for apartments against +1.3 % for houses).
Always low transactions volumes despite a slight rebound
After three consecutive years of decline, volumes of real estate transactions in Switzerland stabilized in 2024 but remain much lower than the historical averages. Nationally, a slight recovery has been observed, but the market remains far from the levels recorded before 2020.
Trends vary strongly according to the cantons. In Zurich, the volumes significantly rebounded in 2024 after a particularly low year. Conversely, Geneva has posted a new decline, reaching its lowest level for more than a decade.
The persistent weakness of transactions does not only result from a problem of financial accessibility. Although prices have increased faster than income, historically low mortgage rates continue to support high demand. The main obstacle remains the shortage of available tenders: new construction fails to meet demand, and the owners rarely put their goods on sale. In Switzerland, the average duration of ownership of a property is around 30 years, even exceeding 50 years in Zurich. For comparison, in France, the average duration of detention is around 7 years.
The construction activity remains insufficient to meet demand. Despite an increase in the number of authorizations issued in 2024, projects are slowed down by complex administrative procedures and frequent oppositions. In addition, new banking regulations (Basel III) could complicate funding for promoters. However, according to the Swiss Society of Entrepreneurs, the number of new residential constructions should increase slightly in 2025, ending five consecutive quarters of decline.
Perspectives: Stable Swiss market despite global uncertainty
The first three months of the year are generally in accordance with our forecasts: a slight increase in prices, comparable to that observed in 2024, and volumes of transactions still lower than the historical average. We had anticipated that fixed mortgage rates over 10 years should not decrease significantly – they have also gone slightly since January.
Since our last December barometer, an important element has changed: the Swiss National Bank (SNB) has lowered its key rate to 0.25 %, in response to moderate inflation, now around 0.3 %. This decision led to a slight decrease in variable rates, while fixed rates left upwards, currently reaching approximately 1.7 % over 10 years. BNS retains a certain room for maneuver to maintain an accommodating policy, but new rate decreases seem unlikely in the short term.
The global macroeconomic framework has become more complex since the end of 2024. Could this have an impact on the Swiss real estate market? Long -term rates have significantly increased in Western markets, not only due to structural budgetary deficits, but also under the effect of increasing geopolitical tensions, fueled by a renewed protectionism initiated by the new American administration. The announcement of new customs duties surprised the markets and contributed to a new increase in bond yields. This has resulted in an increase in funding cost for states and businesses, investors now demanding higher rates to lend in the long term.
These developments could have a double effect on the Swiss real estate market. On the one hand, they could limit any new drop in mortgage rates, especially if international rates remain high. On the other hand, they strengthen the risk of imported inflation, especially since the Swiss franc has been slightly weakened since the beginning of the year. These two factors are to be watched closely, because they directly influence the evolution of long -term mortgage rates, and therefore, ultimately, the purchasing capacity of households on the real estate market.
We plan a progressive de-escalation of trade tensions from the United States, as well as a more accommodating monetary policy on the part of the Federal Reserve. A reduction in the Fed guiding rates, publicly supported by President Trump, could also lighten the pressure on the world’s long rates, thus helping to stabilize, or even soften, the conditions of financing in Switzerland.
In Switzerland, the situation remains relatively stable. The price increase is moderate and in accordance with expectations, but the volumes of transactions are still struggling to leave. The offer remains insufficient in the face of a strong structural request: new construction does not cover the needs, the residents are rare, and the credit criteria remain strict. Despite the increase in the number of building permits in 2024, deliveries planned for 2025 should remain below market needs. We therefore maintain our forecast of a moderate price increase, between +1% and +2% over the entire year 2025.
