Switzerland continues to show resilience
Geopolitical uncertainty and higher energy prices continue to weigh on the global environment, while rising government debt and growing capital requirements for AI infrastructure have put further upward pressure on long-term interest rates.
Switzerland remains comparatively resilient, supported by low inflation, moderate interest rate movements, and a strong Swiss franc. Robust growth in the first half of 2026 has improved the outlook for the year as a whole, although this momentum is unlikely to be fully sustained due to temporary effects related to exports and the pharmaceutical sector.
Overall, economic conditions for Swiss real estate are improving, although uncertainty and some economic risks persist.
Continued strong inflows into Swiss real estate investment vehicles
The Swiss real estate market remains attractive despite global turbulence. A comparatively high risk premium by European standards, strong capital inflows and the limited supply of assets suitable for institutional investors continue to support pricing and transaction activity. In the indirect market, valuations have declined. However, residential real estate funds, in particular, continue to trade at high premiums due to structural supply constraints. As a result, commercial real estate vehicles may currently offer attractive entry opportunities, supported by more moderate valuations and robust market fundamentals.
Lower immigration and increased planning activity are not yet enough to ease market tightness
In the residential leasing market, demand is normalizing and supply is beginning gradually to recover. At the same time, vacancy rates remain at very low levels. Falling vacancy rates in suburban municipalities indicate that the housing shortage in major urban centers is increasingly spilling over into surrounding areas. For investors, market fundamentals are favorable, although regulatory pressure remains elevated.
Employment and population growth continue to support the market, while structural change remains a defining feature
Commercial real estate markets remain resilient despite ongoing structural change. Remote working and, increasingly, AI are reshaping demand for office space, while e-commerce continues to simultaneously weigh on retail space demand while supporting demand for modern logistics properties. At the same time, population and employment growth continue to underpin occupier markets.
There is particularly strong demand for centrally located, well-connected and flexible space, while peripheral properties or assets with limited adaptability are coming under increasing pressure. As a result, location quality, adaptability and active asset management remain important differentiating factors.
Outlook: Healthy fundamentals, sustained strong demand
Under the current proposals, the implications for indirect real estate investments would be particularly far-reaching. If listed real estate companies and real estate funds were made subject to a permit requirement, existing analyses suggest that neither issuers nor stock exchanges would be able to ensure that no foreign investors acquire shares. As a result, delistings would likely be required. This would not alleviate pressure in the housing market and could even indirectly exacerbate existing constraints through reduced capital availability. Overall, however, the Swiss real estate market remains well positioned. Strong fundamentals, stable income returns and sustained demand continue to provide a solid foundation, even in an environment shaped by uncertainty and structural change. Investors who carefully consider regulatory, cyclical and asset-specific risks may continue to find attractive opportunities for long-term investment.
