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Many people dream of owning a home, but doubt whether it’s feasible in today’s market. A UBS study shows it is, but increasingly only if you’re willing to compromise. We explain how.
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In 2026, many tenants will once again ask themselves: does it make more sense to buy or to continue renting? Despite rising real estate prices, home ownership remains attractive – also from a financial perspective.
One key reason is the state of the rental market. Rents have increased significantly in recent years, while financing costs have remained comparatively low due to low mortgage interest rates.
This results in what could be called an “ownership discount”: In Switzerland, the costs of living in an owner-occupied apartment are, on average, 24% lower than those of a comparable rental apartment thanks to low annual financing costs – despite rising real estate prices. Owners can use these savings to build up additional wealth in the long term.
Buying is around 24% more affordable than renting
The potential for appreciation should also be considered: residential property can increase in value over time, making it a potentially good investment. The continuous rise in Swiss real estate prices over the past 15 years has resulted in average equity returns of around ten percent per year.
In addition, owning your own home is not only financially advantageous, it also offers greater security for the future. As an owner, you do not have to worry that the rent will be increased or their lease will be terminated – for example because the landlord needs to use or renovate the property.
The Swiss residential property market remained robust in 2025. However, while prices rose more sharply than in the previous year, they have not reached the peak levels of 2021 and 2022. According to our annual study “UBS Real Estate Focus 2026”, the cost of home ownership increased by 4.1 percent. Growth was particularly strong for condominiums, whose prices increased by 4.8 percent. The increase for single-family homes was 3.4 percent.
Prices of condominiums are expected to rise by around 3.5 percent, and those for single-family homes by about 2.5 percent. The slowdown in price growth is due to below-average economic growth in Switzerland and a weakening labor market. This reduces demand, which is nevertheless expected to remain high overall. The reasons for this are:
The abolition of imputed rental value boosts demand
The upcoming abolition of imputed rental value will enable many homeowners to enjoy significant tax savings, increasing the cost advantage over rental apartments by about four percentage points. This is likely to increase demand for home ownership and raise the value of the real estate portfolio by 2 to 3 percent. Newer condominiums in particular could become more expensive, while older buildings in need of renovation may see larger price reductions, since maintenance costs will no longer be tax-deductible in the future. However, if interest rates rise these effects could quickly diminish.
The biggest challenge when buying today is affordability. Since prices on the Swiss real estate market have risen significantly faster than incomes over the past 15 years, affordability is becoming an increasingly bigger problem. Clear rules apply to calculating affordability: housing costs should not exceed one third of your income. The calculation is not based on the current (low) market interest rate, but rather an “imputed interest rate” of 4-5%. The resulting buffer helps ensure that the buyer can continue to pay the mortgage even if interest rates rise.
Our maximum purchase price calculator answers this question. In just a few steps, you’ll find out what you can afford based on your current financial resources.
Buying a home is a challenge for many households in Switzerland. Nevertheless, the dream of home ownership can still be achievable. The following three options make it easier to purchase your own home.
Those who are willing to compromise on living space can usually benefit from significantly lower purchase prices. This makes it possible to purchase a home earlier and benefit from the long-term increase in property value. After a few years, a possible increase in value can also help finance the purchase of a larger dream property.
Specifically, this could mean foregoing an additional room, such as an office, but a clever floor plan can also reduce the living space required without reducing your quality of life. This trend towards more compact living spaces has been evident since the turn of the millennium. While newly built condominiums around the year 2000 had an average living area of about 125 square meters, today it is just under 100 square meters.
Another important factor when buying real estate is equity. If you contribute a larger portion of the purchase price yourself, you reduce the amount of interest payable and make the property easier to afford. This could even make a larger house or an apartment in a better location a reality. If possible, it often pays to source additional equity – for example from gifts, interest-free, non-repayable loans or advances on inheritance. This typically allows buyers to benefit from rising real estate prices and build wealth sooner than if they had to save all the required capital themselves.
0.30% interest rate reduction
Preferential interest rate on your first mortgage and free banking package for 2 years. Including Platinum Credit Card.
Choice of neighborhood is also a key cost factor. Owning a home in a prime location is unlikely to be affordable for many households. The data from the “UBS Real Estate Focus 2026” study also shows this: a high-quality, 100-square-meter condominium is only affordable for a household with a median income in 17 percent of all municipalities. It therefore pays (off) to expand your search radius. This often allows you to discover new opportunities. Because even outside city centers and in outer suburbs, there are many communities with a high quality of life and good connections to the road network and public transportation. In addition, buyers can afford a much bigger place with the same budget in less sought-after locations. This allows you, for example, to benefit from additional living space for a better workspace or a large garden.
For all municipalities in Switzerland, UBS economists analyzed how many square meters of owner-occupied living space are still affordable today according to calculation guidelines for a household with the local median income (household with average income).
A high-quality condominium (70th price percentile) with 100 square meters of living space is affordable for such a household in only 17 percent of all municipalities, amounting to just 7 percent of the residential population. These are primarily rural and peripheral municipalities. If you opt for an average advertised property (50th price percentile) with a lower standard of finish or compromises in condition or micro-location, the proportion of affordable municipalities rises to 34 percent, which corresponds to 18 percent of the residential population.
Residential property prices in Switzerland continue to rise, albeit at a slower pace than in previous years. The dream of owning your own home is still attainable if you approach it with the right strategy. Those considering buying a single-family home or condominium should keep the following in mind:
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