Price developments on the real estate market

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.

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.

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. This year, we expect a price increase of 3 to 4 percent on average nationwide in the residential property market. For the years 2026 and 2027, we anticipate a slight slowdown in price increases to 2 to 3 percent due to the strained affordability of homeownership. However, not all regions are likely to benefit equally from value gains.

The best conditions for above-average price increases - measured by local demand surplus, momentum, and relative price level in the residential property market - are found in Upper Valais, the Bernese Oberland, Chur, Lucerne, and Schaffhausen. Our analyses indicate below-average price development around Lake Geneva, along the Jura Arc, and in Northwestern Switzerland.