Content:

  • Review: Home prices rose by 1.5 percent in the first quarter of 2025 compared to the previous quarter.
  • The Swiss Real Estate Bubble Index: The UBS Swiss Real Estate Bubble Index increased slightly in the first quarter of 2025 but continues to indicate a moderate bubble risk in owner-occupied housing.
  • Outlook: The prices of residential properties are likely to increase by 3% to 4% this year.
  • Risk map: The analysis shows a bubble risk in the major centres and tourist regions of Graubünden.
The price development on the real estate market is expected to stabilize at a high level in the coming months.

Development of real estate prices in Switzerland

Home prices increased 1.5% quarter over quarter, the highest rise since mid-2022. Compared to the previous year, home prices rose 3.2%. Adjusted for inflation, the price increase was 2.8%.
Asking and existing rents in the first quarter of 2025 were 2.2% and 3.2%, respectively, above the previous year’s level.

The momentum in asking rents has recently slowed significantly. The reference interest rate, which fell in March 2025, is likely to dampen the increase in existing rents in the coming quarters.

 

UBS Swiss Real Estate Bubble Index in the 1st quarter of 2025: moderate

The UBS Swiss Real Estate Bubble Index rose slightly in the first quarter of 2025, from a revised 0.25 to 0.29 index points. The risk of a real estate bubble is therefore classified as moderate.

The low user costs of homeownership compared to renting, the overall moderate demand for mortgages, and the continued slowdown in residential construction activity make a significant price correction appear unlikely.

What is the UBS Real Estate Bubble Index and how is it calculated?

The UBS Swiss Real Estate Bubble Index shows the risk of a real estate bubble – a significant overvaluation of real estate and the likelihood of an imminent price drop – on the Swiss real estate market. UBS economists use a model with different subindices to calculate the bubble index: 

  • price-to-rent and price-to-income ratios (foundation)
  • real rate of price change over three and 10 years (dynamics)
  • cost comparison of purchase and rent (cost)
  • mortgage volume-to-income and residential construction (environment)

Depending on the current index value, the real estate bubble risk is divided into the following four categories:

  • low (below 0)
  • moderate (between 0 and 1)
  • elevated (between 1 and 2)
  • acute (above 2)

Description

Download our detailed analysis now

The more you know, the more you understand: you’ll find our complete analysis of the Swiss housing market in the latest issue of the Swiss Real Estate Bubble Index.

What is the forecast for the development of the real estate market in Switzerland?

Despite attractive financing conditions, a slowdown in home price increases is expected in the coming quarters. Economic growth in Switzerland is at risk of losing further momentum due to US tariffs. Rising uncertainty regarding jobs and incomes is likely to negatively impact demand for homeownership. Overall, we expect residential property to become 3 to 4% more expensive this year.

The risk map shows in which municipalities the real estate market is at risk of overheating

The map shows price developments over the last five years for all 106 Swiss economic regions, as well as an indication of regional risk based on the development of the price-to-income and price-to-rent ratios.

  • Significant imbalances exist almost exclusively in the tourist regions of Graubünden, a consequence of the second-home boom and limited supply.
  • In Western Switzerland, elevated imbalances are found in the regions of Lausanne and Yverdon. In the Geneva region, there is no elevated imbalance due to recently below-average price development.
  • In the primary residence markets of German-speaking Switzerland, a significant imbalance is seen only in the Einsiedeln region.
  • In most regions, the ratio of purchase prices to rents has decreased over the past year, while the ratio of purchase prices to incomes has in some cases increased significantly.
Real estate prices in different regions in Switzerland are compared with rental prices. The resulting map shows which regions are at risk of a real estate bubble.
Source: UBS. Imbalances: very high: change in the price-income and price-rent ratios greater than in 90 percent of the regions. High: change in the price-income and price-rent ratios greater than in 75 percent of the regions.

The facts about your preferred municipality

Do you want to understand how property prices or population levels have changed in a municipality? Or how the location is perceived in general? How high are taxes? The UBS municipality guide is free of charge and answers all your questions.

FAQ real estate prices and real estate market

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Disclaimer

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