Key facts:
- Global uncertainties and trade tensions are increasing interest in stable real estate investments in Switzerland.
- The SNB lowers the key interest rate to 0.25 % – mortgages become cheaper, demand picks up.
- The Swiss residential real estate market remains stable: price growth of 2-4 % is expected for 2025.
When the world comes apart at the seams, people look to the reliable. In times of geopolitical uncertainties, trade conflicts and economic risks, it is no coincidence that investors are putting their capital in a safe place – including Switzerland. The Swiss franc is gaining strength, confidence in the location is growing and real estate is once again coming into focus.
But what does this trend mean in concrete terms for owners? Those who already own will benefit – but not automatically. This is because the flight of capital into the Swiss franc is not only changing currency relations, but also supply, demand and yield expectations on the real estate market. In our current market overview, we shed light on this area of tension between global uncertainty and local growth potential – in a well-founded, differentiated manner and with a view to the opportunities that are now available.
Capital flight into the franc – what does this mean for owners?
In geopolitically unstable times, capital flows are reoriented. Investors are looking for stability, legal certainty and a reliable currency. Switzerland meets all of these criteria – and is benefiting accordingly: the Swiss franc has appreciated significantly against the dollar and euro. A clear “safe haven” effect, as the markets regularly demonstrate in times of crisis.
These capital inflows have a direct impact on the demand for tangible assets – especially real estate. Residential property in Switzerland is considered stable, stable in value and crisis-proof. In an environment in which bonds hardly yield any returns and equities are fraught with uncertainty, interest in residential property is increasing noticeably – not only among domestic investors, but also among foreign investors.
At the same time, however, the challenges are also increasing: The strong franc is weighing on the export industry, which can have a regional impact on employment and consumption. However, demand for real estate has so far remained largely unaffected – particularly in the residential sector, where supply and demand are structurally out of balance.
Residential real estate: demand, prices – and what is realistic
Despite geopolitical uncertainty and an economic slowdown, the Swiss residential real estate market remains robust. The vacancy rate across Switzerland is only 1.08%, and in urban centers such as Zurich and Geneva it is even significantly lower. Demand for housing remains high, driven by immigration, urbanization and stable employment.
Rents rose by around 5% in 2024, while the price of residential property increased by around 2.5-3% according to UBS and FPRE – with a positive trend for 2025. The reasons are clear: demand is outstripping supply, new construction is stalling and financing costs are falling again. Demand is particularly strong for energy-efficient refurbished properties, apartment buildings with stable rental income and condominiums with good connections.
An abrupt price increase as in the boom years is not to be expected – but everything points to a moderate but stable upward trend. UBS expects price growth of up to 4% in sought-after regions in 2025. In weaker locations, there may be sideways movements, but without dramatic declines.
Interest rate policy: SNB lowers key interest rate to 0.25%
A key driver of the current momentum is interest rate policy. In March 2025, the Swiss National Bank (SNB) rather surprisingly lowered the key interest rate to 0.25% – a reaction to the sharp fall in inflation (most recently at just 0.3%) and the increasing downside risks for the economy.
This is a positive signal for owners, buyers and investors : mortgage interest rates are falling, loans are becoming cheaper and real estate remains attractive as an asset class. The reference interest rate for rents has also been lowered – leading to lower rents in the short term, but higher demand to buy in the long term.
Particularly noteworthy: the difference between rental and ownership costs has shifted in favor of buying. According to UBS, buying a comparable property is currently up to 1% cheaper than renting – a clear driver of demand for property.
Construction costs and supply: Why existing stock wins
Despite falling financing costs, construction activity remains subdued. This is due to higher construction costs caused by higher material prices, longer delivery times and – not least – new trade barriers. Import duties on building materials such as steel, aluminum and ceramics are having a direct impact on the construction industry.
Many project developers are currently cautious. In urban centers, the supply of building land is also scarce and regulatory requirements are making approvals more difficult. The result: fewer new properties, increasing demand for existing properties.
For owners, this means that the market remains tight. Anyone selling today can expect high demand – especially in well-developed regions with stable rental yields and good substance.
Looking back: what past crises teach us
The Swiss real estate market has proven to be extremely crisis-resistant in the past. Whether during the 2008 financial crisis, the euro crisis from 2011 or the coronavirus pandemic – none of these scenarios led to a widespread fall in prices. On the contrary, it was often during these phases that residential real estate was in particularly high demand.
Even today, many factors speak in favor of stability: solid financing, a strong domestic economy, limited supply and a central bank policy that aims for balance. There are risks – such as a further escalation in international trade or a sudden turnaround in interest rates – but all signs are currently pointing towards moderate growth and high demand.
Owners benefit – but with a sense of proportion
The geopolitical situation remains tense – but the Swiss real estate market is once again proving its resilience. This results in clear advantages for owners:
- Who sell are met with high demand and stable valuations.
- Investors benefit from low interest rates and a limited supply.
It is important to remain realistic: The market is strong, but differentiated. Prime locations and properties with good substance remain in demand, while peripheral regions or properties in need of renovation may show less momentum. Developments over the next few months will depend heavily on the global situation and monetary policy – but the current forecast remains positive.
In short: Swiss residential real estate will remain a stable value in 2025. Now is the right time for owners to think strategically – and to exploit the market with a clear view of opportunities and substance.
Data are without guarantee. The information on these Internet pages has been carefully researched. Nevertheless, no liability can be assumed for the accuracy of the information provided.