The cantons with the greatest demographic risks include Ticino, Bern, Neuchâtel, Jura, Appenzell Ausserrhoden, Nidwalden, Obwalden, Graubünden, Glarus and Schaffhausen. They account for around 23 percent of the total mortgage volume in Switzerland and are therefore anything but peripheral regions. At the same time, they are structurally less well equipped for the future.
The core of the problem lies in the age structure. Population growth is taking place primarily in the over 65s. People who rarely move and hardly ever demand additional living space. At the same time, the number of working people, i.e. those households that typically buy their own home or enter into new tenancies, is falling. The result is less demand, more patience when selling and growing price markdowns. This is particularly noticeable in markets with many single-family homes and vacation properties, for example in parts of Ticino, Graubünden or the Jura.
Demographics beat price fantasy
The study outlines a market that is likely to diverge significantly over the next 20 years. While owners in many of the cantons concerned still expect prices to continue to rise, demographics paint a different picture. If hardly any young households move in and immigration remains weak, the surge in demand that justifies today’s valuations will not materialize.
For owners, this means longer holding periods, higher sales risks and, depending on the location, more significant price falls. Older single-family homes in peripheral communities that no longer meet the expectations of new generations of buyers in terms of energy efficiency and quality are particularly exposed. Where there is a lot of supply on the market at the same time, for example from estate situations, price pressure can increase rapidly.
Booming cantons as a counterbalance
On the other hand, there are the growth cantons of Zurich, Vaud, Lucerne, Geneva, Thurgau, Aargau, St. Gallen, Valais, Fribourg, Zug and Basel-Stadt. According to the analysis, they are expected to absorb almost 86 percent of future population growth. Two thirds of the mortgage volume is already concentrated in these cantons, and the trend is rising.
This is where immigration meets economic dynamism, urban centers and strong labor markets. For the real estate market, this means sustained high demand, stable to rising prices and lower structural risks, despite digitalization, the interest rate turnaround and increasing regulation. The polarization between “loser” and “winner” cantons is therefore likely to intensify further.
Consequences for banks and investors
For banks, insurance companies and pension funds, the demographic perspective is more than just a footnote. In many portfolios, regional risks have so far been inadequately reflected. Regional institutions with a strong focus on their home canton in particular bear increased cluster risks in shrinking regions. Especially if a large proportion of the portfolio consists of single-family homes in rural locations.
It is not only location, condition and affordability that count, but also the question of how many potential buyers will still be there in 10, 15 or 20 years’ time. If you want to manage mortgages and real estate investments in the long term, you need to systematically consider demographics, housing demand and the local economic structure together.
What owners can do now
For owners in the affected cantons, it is worth taking a sober look at their own property in terms of location, target group, energy status and possible conversion. Those who actively manage, modernize and think about alternatives at an early stage have a clear advantage over those who simply hope that prices will continue to rise.
The market is not tilting across the board. Housing will remain scarce in many cities in the “loser” cantons, while rural areas will come under greater pressure. The decisive factor will be how precisely market participants understand the differences within a canton and how quickly they adapt their strategies to the new demographic reality.
