Content:

  • Review: Home prices rose by 0.6 percent in the 4th quarter of 2024 compared to the previous quarter.
  • The Swiss Real Estate Bubble Index:ÌýThe ÃÛ¶¹ÊÓƵ Swiss Real Estate Bubble Index continued to drop in the fourth quarter of 2024 and currently stands at 0.29 index points.
  • 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, canton of Vaud, Limmattal and Einsiedeln.
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 rose by 0.6% in 4Q24. Compared to theÌýprevious year, they were up 2.4%, and after adjusting forÌýinflation, the gain was 1.8%— slightly above the long-termÌýaverage.

By the end of 2024, existing rents and offered rentsÌýwere 3.3% and 2.3% higher, respectively, than a yearÌýearlier. Momentum in rental prices, however, has slowedÌýconsiderably. Offered rents dipped slightly quarter overÌýquarter, and the quarterly increase in existing rents wasÌýroughly half of what it was in summer 2024.

 

ÃÛ¶¹ÊÓƵ Swiss Real Estate Bubble Index in the 4th quarter of 2024: moderate

The ÃÛ¶¹ÊÓƵ Swiss Real Estate Bubble Index continued to declineÌýin 4Q24, reaching 0.29 index points. According to theÌýindex, the risk of a real estate bubble remains moderate.

Low ownership costs relative to renting, subdued mortgageÌýdemand, and a further slowdown in construction activityÌýmake a pronounced price correction increasingly unlikely.

What is the ÃÛ¶¹ÊÓƵ Real Estate Bubble Index and how is it calculated?

The ÃÛ¶¹ÊÓƵ 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. ÃÛ¶¹ÊÓƵ economists use a model with different subindices to calculate the bubble index:Ìý

  • 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 currentÌýindex value, the real estate bubble risk is divided into the followingÌýfour categories:

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

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?

Because of significantly improved financing conditions, theÌýpace of home price increases is expected to accelerate inÌýthe coming quarters. The demand index—the number ofÌýactive property searches for owner-occupied homes—wasÌýmore than 20% above its prior-year level in December 2024.ÌýHome prices are projected to rise by about 3-4% 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 lastÌýfive years for all 106 Swiss economic regions, as well as anÌýindication of regional risk based on the development of theÌýprice-to-income and price-to-rent ratios.

  • In German-speaking Switzerland, we see highÌýimbalances in the Limmattal region and now also inÌýthe Einsiedeln region. There is also a newly elevatedÌýimbalance in the Pfannenstiel region. Generally, in theÌýlocal primary housing markets of German-speakingÌýSwitzerland, the ratio of purchase prices to rents hasÌýonly increased below average across the board.
  • In Western Switzerland, imbalances are primarily foundÌýin the canton of Vaud, where prices have decoupled fromÌýrents and incomes above average since the third quarterÌýof 2019. In the Geneva region, there is no longer anÌýelevated imbalance, as the recent price development hasÌýbeen below average.Ìý
  • High imbalances exist as a result of the second homeÌýboom in the tourist regions of Graubünden. In theÌýmountain regions of Central Switzerland, the imbalancesÌýare elevated.

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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: ÃÛ¶¹ÊÓƵ. 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 ÃÛ¶¹ÊÓƵ municipality guide is free of charge and answers all your questions.

FAQ real estate prices and real estate market

Good to know

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