|  Ramzi Chamat

Dynamics of the Swiss real estate market: Why buying is becoming the norm.

In the changing landscape of the Swiss real estate market, an emerging trend is clearly emerging: property buying is gaining ground over rental. This phenomenon, propelled by various economic factors and adjusted monetary policies, marks a significant turning point for Swiss residents and foreign investors. While mortgage interest rates are experiencing a notable decline, stimulated by the decisions of the Swiss National Bank, and rents continue their dizzying rise, the purchase of real estate now presents itself as a more financially advantageous and strategically more advantageous option. solid. This preamble aims to explore the multiple facets of this evolution, analyzing the causes, implications and future prospects of this booming market.




In Switzerland, the real estate market is undergoing a significant transformation. With the anticipated reduction in key interest rates by the Swiss National Bank (SNB) and the rising costs of renting, purchasing real estate is becoming increasingly attractive. This trend, driven by various economic and social factors, highlights a shift in the perception of real estate investment in the country.



I. Economic Context


Switzerland, known for its economic stability, is facing a significant change in its real estate market. The SNB plans to lower key interest rates, a decision that has already led to a reduction in fixed-rate mortgage rates. This situation is making property acquisition more accessible for many Swiss and residents.



II. Increase in Rental Costs


Concurrently, the rental market in Switzerland is experiencing a price increase. In 2023, rents rose by about 5%, and this upward trend is expected to continue into 2024. The acute housing shortage, particularly in urban areas, exacerbates this increase. Experts predict that this situation will force tenants to allocate a larger portion of their income to housing.



III. Housing Shortage


Switzerland is facing an unprecedented housing shortage. In 2023, the housing vacancy rate was only 1.2%, with even lower figures in regions such as Zurich, Central Switzerland, and the Lake Geneva Arc. This shortage is exacerbated by high net immigration and a reduction in the number of building permits issued.



IV. Slowdown in the Rise of Real Estate Prices


Following a surge in real estate prices after the Covid-19 pandemic, the price increase began to slow down at the end of 2023, reaching a growth of 4%. This trend suggests a possible stabilization of real estate prices, thus offering an opportunity for potential buyers.



V. Comparative Advantages of Property Ownership


The combination of rising rents and falling mortgage rates is making the purchase of real estate increasingly attractive in Switzerland. Experts believe that, in the current context, acquiring property could be more financially advantageous than renting in the long term.



VI. Investing in Real Estate: An Attractive Option


Real estate remains an attractive investment in Switzerland, particularly for those looking to protect against inflation and secure their financial future. Property offers not only a place of residence but also a potential source of income and stable asset value.



VII. Challenges and Opportunities


Nevertheless, the Swiss real estate market presents challenges. High demand and a shortage of available housing can make it difficult to find the ideal property. Moreover, although mortgage rates are low, the eligibility criteria for obtaining a loan remain strict, requiring careful financial planning.





In conclusion, the current dynamics of the Swiss real estate market favor purchasing property. With the forecasted decrease in key interest rates, the increase in rental costs, and the housing shortage, investing in real estate appears to be an increasingly wise option for Swiss residents. This represents a significant opportunity for those looking to invest in a traditionally stable and secure market.

The challenges of building permits in Geneva and their impact on urban densification in Switzerland.

The challenges of building permits in Geneva and their impact on urban densification in Switzerland.

Continued rise in property prices in 2023 and outlook for 2024.

Continued rise in property prices in 2023 and outlook for 2024.