Tag: Wohneigentum

Owner-occupied rental value not until 2029

In the fall of 2025, the Swiss population voted clearly in favor of abolishing the imputed rental value. The fictitious rental income that homeowners have had to declare as taxable income for decades, even though not a single franc flows in, has thus become politically obsolete. However, it took the Federal Council until the end of March 2026 to set a date for its entry into force and it ended up in 2029.

Mountain cantons put the brakes on
After the vote, Federal Councillor and Finance Minister Karin Keller-Sutter still mentioned 2028 as the earliest possible date. The mountain cantons, including Valais, pushed for 2030, as they need time to introduce a new tax on second homes to compensate for their tax losses. The year 2029 is the result of this trial of strength.

70 million franc hole
The canton of Valais alone is expecting tax losses of over 70 million francs as a result of the reform. The new property tax for second homes is intended to close this gap. But its implementation is complex. Cadastral values are outdated and the definition of second homes for private use is unclear. The question of whether the municipalities or the canton will levy the new tax is still open.

Homeowners are outraged
The Valais homeowners’ association campaigned strongly for the abolition of the tax during the referendum campaign. Association director Reinhard Meichtry commented on the Federal Council’s decision, saying that he initially believed it was an April Fool’s joke and that the decision was “absolutely unacceptable”. Meichtry announced that he would apply to the Federal Council for a rejection and also doubted the seriousness of the communicated tax loss figures.

What applies now
The current system will remain unchanged until the end of 2028. Owners continue to declare the imputed rental value and can deduct mortgage interest and maintenance costs. Anyone planning major renovations or mortgage adjustments should make strategic use of this transition phase, as most of these deductions will no longer apply when the system changes in 2029.

April 2026
Zurich reintroduces hardship clause for imputed rental value

The cantonal council approved the reintroduction of the hardship clause at second reading by 136 votes to 29. The aim is to prevent situations in which homeowners have to sell their home due to rising imputed rental values and tax burdens. This was triggered by a Federal Supreme Court ruling that overturned the previous legal basis.

Finance Director Ernst Stocker subsequently deleted the old clause, but applied for a new transitional regulation until the imputed rental value is completely abolished. Following the referendum in September to abolish the imputed rental value, the regulation will only be in place for a few more years.

Political controversy
While there was broad support, the Greens, AL and EVP rejected the model. They criticized the fact that tax relief does not have to be repaid in the event of inheritance and saw this as unequal treatment compared to tenants. However, the corresponding repayment proposal was clearly defeated.

The government council still has to decide on Stocker’s transitional regulation. Both measures, the hardship clause and the transitional regulation, only apply until the anticipated abolition of the imputed rental value in 2027 or 2028. Zurich is thus sending a clear signal for a socially responsible property policy during the transitional phase of the tax reform.

November 2025
HEV real estate survey 2025

According to the survey of 432 real estate professionals, interest in property is increasing in almost all market segments. Single-family homes in particular are seeing an increase in demand, which is already above the 2024 level. Condominiums and apartment buildings also remain in demand, while the number of available properties is decreasing.

The imbalance between supply and demand is leading to a relative shortage, the impact of which varies from region to region. This is most pronounced in densely populated central cantons and growth regions.

Building land and new construction as bottlenecks
The high demand for building land illustrates the growing pressure on future construction activity. Over half of those surveyed reported increasing interest in plots of land, but in most regions there is a lack of sufficient building land ready for planning.

At the same time, construction activity remains too weak to even come close to meeting demand. High construction costs, lengthy approval procedures and a lack of land are dampening momentum. This is structurally exacerbating the supply shortage. A phenomenon that has been apparent for years.

Price pressure continues
Three quarters of those surveyed expect prices for residential property to continue to rise in the coming year. The combination of low new construction activity, persistently high demand and political and regulatory hurdles is creating an environment in which price adjustments are becoming the norm. For many buyer households, owning a home is increasingly becoming a math problem, especially as interest rate trends are placing an additional burden on financing.

Structural stress test for the middle class
Restricted access to home ownership has a long-term impact on the social structure. For decades, home ownership has been a central pillar of wealth accumulation and retirement provision in Switzerland. If this access is systematically made more difficult, the financial prospects of broad sections of the population will shift, with potential effects on consumer behavior, choice of location and family planning.

Political and planning levers
HEV Switzerland is therefore calling for clear political steps to break through the structural delay. Simpler approval procedures, shorter planning periods, less bureaucracy and effective measures against abusive objections. New housing supply can only be created if the regulatory framework is reliable and investment-friendly.

A market at a turning point
The survey makes it clear that the real estate market is at a crucial point in 2025. While demand remains robust and confidence in home ownership is unbroken, the structural shortage is jeopardizing the balance of the system. Without a correction, the price spiral threatens to become entrenched, with consequences for entire generations of prospective buyers.

The coming years will show whether politicians, planners and market players can reverse the trend or whether the bottleneck will become the new normal in the Swiss real estate market.

November 2025
Promoting ownership instead of preventing it

Switzerland is and remains the land of tenants. For many, the dream of owning their own home is receding further and further into the distance. Rising prices, higher interest rates and stricter mortgage regulations have made home ownership unattainable for broad sections of the population. Young families and people on middle incomes in particular are increasingly failing to overcome the hurdles of the system. Yet home ownership is much more than a status symbol. It is a form of retirement provision, a contribution to personal responsibility and stability in an increasingly uncertain time. Living in your own four walls saves costs in the long term and reduces the burden on the pension system.

The abolition of the imputed rental value is therefore not a dam break, but a necessary door opener. It puts an end to an injustice in which fictitious income is taxed that does not actually exist. The criticism that this would create “tax loopholes” falls short of the mark. It is crucial that the reform is implemented with clear and fair rules.

Will this turn Switzerland into a country of privileged owners? No, on the contrary. Only by reducing the imputed rental value will we create the conditions for more people to take the step into property ownership in the first place. The goal must be: property for the many instead of privileges for the few.

Support yes, nationalization no
The primary goal of a sensible housing policy must be the creation of suitable and affordable living space. However, the state cannot achieve this alone. Public building authorities are often cumbersome, inflexible and expensive. In cities such as Zurich, it can be seen that increasing nationalization of the housing market is leading to bottlenecks and an artificial shortage.

We need private developers who can react quickly and efficiently to the needs of the population. The task of the state is not to build itself, but to create the right framework conditions: faster approval procedures, flexible conversions and planning that allows rather than prevents innovation.

A modern instrument would be a change in the system of state housing subsidies. Away from subsidies for buildings and towards housing vouchers for people who actually need support. In this way, help can be targeted to where it is needed without distorting the market.

How much government does the real estate world still need and how much market can it tolerate? The answer is simple: the state should set frameworks, but not build walls. It should create incentives, not block them.

Looking ahead
The abolition of the imputed rental value is not an isolated step, but part of a larger development: towards more personal responsibility, fair opportunities for tenants seeking ownership and a functioning housing market based on trust and innovation, not bureaucracy.

Whether this becomes the first domino for further tax relief depends on political will. But one thing is certain: those who want to strengthen people in their own four walls are strengthening the foundations of our country.

October 2025
Farewell to imputed rental value

The adoption of the bill on the cantonal property tax for second homes marks the end of the imputed rental value. However, the change will take effect in two to three years at the earliest and will fundamentally change the everyday lives of many of those affected. Not only owners of owner-occupied and rented properties will feel the effects, but also households with debts without property ownership.

Simplifications and exemptions
With the abolition of the imputed rental value, maintenance costs and debt interest will also no longer be tax-deductible. However, to make it easier to purchase residential property, special rules apply for the first ten years after purchase. Debt interest of up to CHF 10,000 for married couples and CHF 5,000 for single persons is still deductible, but the remaining maximum amount is reduced by ten percent per year.

Tax declarations will be simpler and the tax burden for many homeowners will fall in the current interest rate environment. Value-preserving and value-enhancing costs should be properly documented, as in future they can only be claimed when property gains tax is paid, i.e. when the property is sold.

More restrictions on the deduction of debt interest
Owners of investment properties are particularly affected by the reform. Interest on debt can now only be deducted in proportion to the value of the property in relation to total assets. This increases the tax burden and significantly limits the previous advantages.

Taxpayers without real estate
Households without real estate are also affected. Private debt interest, for example for loans or small loans, may no longer be offset against tax in future. This turns previous practice on its head and may lead to higher tax payments.

Uncertainties and cantonal competence
The cantons will have the option of levying a special property tax on second homes. This is a particularly sensitive issue for regions with a high level of tourism, as new taxes can affect the attractiveness of the market. It remains to be seen what the specific assessment bases will look like and which cantons will make use of the new options.

The cantons can continue to allow temporary deductions for energy-efficient renovations and environmental protection measures until 2050. It is not yet known which cantons will offer this.

Strategies for mortgages and investments
The reform not only affects the tax rate, but also personal financial strategies. The question of how high mortgages should be set in future and whether amortization makes sense is becoming increasingly important. Anyone who uses capital for amortization ties it up in the property and loses liquidity for other purposes such as retirement provision or new investments. The decision on the optimal financing therefore requires individual consideration.

Effects on the real estate market
Whether the reform affects prices depends above all on the situation of new buyers, the majority of whom are highly mortgaged. According to SNB statistics, 40 percent of newly purchased homes are financed at over 74 percent of their value. Older properties in particular continue to lose tax advantages due to the limited deduction options. New condominiums in the canton of Zurich are on average 20 years old, single-family homes even around 50 years old. The fundamental challenges of high prices and scarce funds for acquisition remain unresolved by the reform.

The abolition of the imputed rental value promotes the price difference between new buildings and older properties. Second homes are likely to become less attractive as a result of the new property tax, but experts do not expect prices for vacation homes to fall, as the supply shortage is too great.

Prices for Swiss homes could rise by 4% this year and 4% next year, and by as much as 4.5% in the canton of Zurich. Renovating and maintaining the value of old buildings is becoming more important than ever, but not every investment pays off. Homeowners need to keep a keen eye on their long-term strategy: Is refurbishment worthwhile or is a new replacement building imminent?

Reform as a joint project
The changes are based on a close link between legislative and constitutional amendments. The abolition of the imputed rental value will only come into force if the referendum on the new property tax on second homes is successful. Parliament discussed the scope and form of the tax intensively for months. In tourist cantons in particular, there is a great deal of skepticism as to whether reduced revenue can be offset by new taxes. The laws come into force together, a reform with many facets.

Tax and financial effects at a glance
The mortgage interest rate determines whether owners benefit. If interest rates are low, the tax burden falls for the majority. If interest rates are high, taxes increase because interest on debt can hardly be deducted any more. For the public sector, the reform could result in a loss of revenue of CHF 1.8 billion. From 3 percent mortgage interest, however, additional revenue is possible for the state as a whole. The actual effects remain unclear for the time being due to various uncertainties.

September 2025
Baby boomers will not trigger a wave of home sales

Hopes of lower prices on the residential property market as a result of the so-called silver tsunami of baby boomers entering retirement age en masse will not be realised. This is the conclusion of Raiffeisen ‘s property study for the third quarter of 2025, according to which the massive demographic shift triggered by the retirement of the baby boomer generation born between 1955 and 1969 will not lead to a greater supply of residential property and consequently to falling prices.

The main reason for this is their extremely low residential mobility: the relocation rate of homeowners of retirement age is just around 1.5 per cent for both condominiums and single-family homes. In contrast, the relocation rate for retirees living in rented flats is almost three times as high at 4.1 per cent.

“The increase in vacancies in residential property observed from 2023 onwards is not a harbinger that demographic ageing will lead to a structurally higher vacancy rate in property,” explains Raiffeisen’s Chief Economist Fredy Hasenmaile in a press release. “It can be explained primarily by the higher interest rates in the meantime and the resulting temporary loss of the housing cost advantage in property ownership.”

According to Raiffeisen, factors such as the severe supply shortage, low interest rates and immigration have had a much greater impact on price trends than the ageing of society. Demand also far exceeds supply on the rental flat market. Despite the lively public debate, housing construction has not got off the ground. Accordingly, according to Hasenmaile, “a noticeable increase in asking rents and declining vacancy rates must also be expected in the future”.

September 2025
Zurich home prices remain on an upward trend

Favourable financing costs are continuing to drive demand for residential property in the canton of Zurich, Zürcher Kantonalbank reports in a press release. According to its surveys for the ZHK Real Estate Barometer in Q2 2025, prices for owner-occupied homes in the canton of Zurich were 4 per cent higher in the quarter under review than in the same quarter of the previous year. At the same time, prices in Zurich’s agglomeration municipalities and the city of Winterthur (Regio region) rose even more sharply by 4.3 per cent. The experts at ZKB expect the trend towards rising prices to continue over the next two years due to the ongoing excess demand.

The cantonal bank’s experts have identified “signs of an easing” in asking rents in the first half of 2025. After growth rates of over 10 per cent in some cases in the last two years, they are currently observing an increase of less than 4 per cent. However, even with declining population growth, current construction activity is not sufficient to reduce the excess demand.

However, tenants in the canton of Zurich could benefit more than average compared to the rest of Switzerland from the latest reduction in the base rate in June. Following a fall in the reference interest rate to 1.5 per cent in March, the experts at ZKB expect a further reduction to 1.25 per cent by the end of the year. This means that around 70 per cent of rental households in the canton of Zurich could request a rent reduction. Across Switzerland, this applies to 46 per cent of rental households.

August 2025
Prices for residential property continue to rise

According to surveys by Moneypark and Pricehubble, single-family homes increased in price by an average of 3.4 percent nationwide, while condominiums rose by 2.4 percent. Year-on-year, this corresponds to an increase of 7.4 percent for houses and 4.2 percent for apartments. The regional picture is varied. House prices rose by 3.6% in French-speaking Switzerland and by 3.2% in German-speaking Switzerland. Condominiums rose in price similarly in both parts of the country, with Western Switzerland slightly ahead in a year-on-year comparison.

Medium-term mortgages in vogue
When it comes to financing, buyers increasingly prefer medium-term mortgages with terms of five to nine years. At the same time, Saron mortgages are gaining in popularity. Particularly in German-speaking Switzerland, where they account for 19 percent of new contracts. In French-speaking Switzerland, this figure is 7 percent. For first mortgages, the Saron share is around 10 percent, for second mortgages over 20 percent. This financing solution offers buyers flexibility and allows them to benefit from the current low prime rate.

Banks expand market share
The rising demand for Saron mortgages is also having an impact on market distribution. Banks were able to increase their share to 67%, an increase of 12 percentage points compared to the first half of the previous year. Insurance companies, on the other hand, lost significant ground, with their market share falling to 19 percent. Pension funds increased and now hold a 14% market share, but are not benefiting from the Saron mortgage business, which is offered exclusively by banks.

Outlook
With persistently high demand, limited supply and a growing preference for flexible financing models, the upward trend in residential property prices is likely to continue in the coming quarters. At the same time, the development of interest rates will be decisive in determining whether Saron mortgages can continue their upward trend.

August 2025
A decisive vote for Switzerland

On September 28, 2025, the Swiss people will vote on the abolition of the imputed rental value. The imputed rental value is a notional income that owners of owner-occupied properties must declare in their tax return. This value corresponds to around 60 to 70 percent of the rent that could be earned for the property. The abolition of the imputed rental value is linked to the introduction of a new property tax on second homes in order to compensate for potential tax losses for the cantons.

Linked decisions and cantonal differences
The vote on the abolition of the imputed rental value is closely linked to the introduction of a cantonal property tax on second properties. This tax is subject to a mandatory referendum, which means that the imputed rental value will only be abolished if the people and cantons approve the new tax. The voting results could vary greatly between the cantons, as the impact varies greatly from canton to canton.

The Central Board of the Swiss Federation of Master Builders has decided to abstain from voting, as the pro and contra arguments are balanced from a national perspective. Almost 1.4 million households in Switzerland would be affected by the abolition, which corresponds to around a third of all households. The reduction in tax revenue is estimated at CHF 1.7 billion per year1.

Effects on renovations and tax deductions
The abolition of the imputed rental value would also mean that deductions for maintenance costs such as energy-related renovations for owner-occupied residential property would no longer apply at federal level. However, at cantonal level, deductions for dismantling costs for replacement new builds, expenses for monument preservation and energy-saving measures would remain permissible. It remains uncertain to what extent the lack of deductibility will actually lead to a reduction in renovations, as the tax burden for property owners would also fall thanks to the abolition of the imputed rental value.

Property tax on secondary properties
The introduction of property tax on secondary properties is intended to help the cantons compensate for any tax losses. Each canton can decide for itself whether it actually introduces this tax and to what extent. The abolition of the imputed rental value has been the subject of political debate for decades and has so far survived every attack. in 2017, parliament made a new attempt to abolish the imputed rental value4.

A hotly contested vote
The vote on the abolition of the imputed rental value and the introduction of property tax on second homes is likely to lead to a hotly contested vote. The bill is linked to the Federal Act on the System Change in Home Ownership Taxation. Only if the constitutional amendment is approved by the people and the cantons in the referendum can the bill for the change in the system of residential property taxation and thus the abolition of imputed rental value taxation come into force.

The Swiss Homeowners’ Association has already decided to vote in favor of the proposal. The abolition of the imputed rental value tax is considered to be long overdue. The “Eigenmietwert-Nein” committee also recommends a Yes vote on the bill to abolish the imputed rental value tax.

August 2025
Condominiums are more expensive than single-family homes

ImmoScout24 introduces a press release on the current ImmoScout24 Purchase Index by stating that the trend towards home ownership is continuing. It is compiled monthly by the property marketplace, which belongs to SMG Swiss Marketplace GroupAG, in collaboration with IAZI, a consultancy specialising in real estate. The current purchase index for May shows an increase in prices compared to April for both condominiums and single-family homes.

At 0.8 per cent, prices for owner-occupied flats rose much more sharply across Switzerland than prices for single-family homes (0.3 per cent). However, the experts have identified significant differences within the individual regions. “The choice is currently particularly large in the Lake Geneva region,” Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group, is quoted as saying in the press release. “By contrast, supply is tightest in the greater Zurich region, one of the three most populous areas in Switzerland.”

In the greater Zurich region, prices for single-family homes have risen particularly sharply by 3.9 per cent month-on-month. Eastern Switzerland is at the other end of the scale. Here, prices fell by 2.1 per cent compared to April. Eastern Switzerland, on the other hand, led the way with a 2.7 per cent increase in condominiums. The Mittelland brought up the rear here with a fall of 0.7 per cent.

ImmoScout24 is a division of SMG Swiss Marketplace Group AG. This combines the digital marketplaces of TX Group, Ringier and Mobiliar.

June 2025
Prices for residential property on the rise

Anyone who purchased residential property in the first quarter of 2025 had to pay around 0.7 per cent more across Switzerland than in the previous quarter, according to the Federal Statistical Office(FSO) in a press release on the current Swiss Residential Property Price Index. Year-on-year, the experts at the FSO have observed a 4.1 per cent increase in residential property prices. The Swiss Residential Property Price Index is compiled by the FSO on a quarterly basis.

In the quarter under review, prices for single-family homes rose comparatively strongly with an average increase of 1.5 per cent compared to the previous quarter. Prices for owner-occupied flats rose by only 0.1 per cent across Switzerland in the same period. Year-on-year, prices for single-family homes were 3.6 per cent higher across Switzerland, while prices for condominiums were 4.6 per cent higher.

In terms of municipality type, the price increase for single-family homes was strongest in the intermediate municipalities at 3.4 per cent. In the urban municipalities of large conurbations, on the other hand, the experts registered a 0.4 per cent fall in prices for single-family homes. In the case of condominiums, the largest increase of 1.2 per cent was observed in the urban municipalities of medium-sized conurbations. By contrast, prices for owner-occupied flats in the urban municipalities of a small conurbation or outside a conurbation fell by 1.7 per cent compared to the previous quarter.

May 2025
Raiffeisen analyses abolition of imputed rental value

Raiffeisen has analysed the planned abolition of the taxation of imputed rental value for owner-occupied residential property. In the winter session in December, the Federal Parliament decided to change the system of home ownership taxation. Now the people have the final say at the ballot box, according to a press release from Switzerland’s second-largest banking group.

If the proposal is accepted, homeowners would realise considerable tax savings in some cases, depending on the type of household, given the prevailing low interest rates. The housing cost advantage of home ownership over renting is growing steadily and could rise to up to 30 per cent over the course of the year.

If the imputed rental value were to be abolished, home ownership would become noticeably more financially attractive overall in the current market environment and consequently also increase in value, according to Raiffeisen. However, homes in need of renovation are likely to lose value due to the elimination of deferred tax deductions as a result of the reform.

“One of the potential losers of the reform is the construction industry. Although it is likely to benefit from many last-minute orders in the short term during the transitional phase until the reform comes into force, in the long term fewer funds will flow into the renovation of residential buildings due to the elimination of a large proportion of tax maintenance deductions,” Fredy Hasenmaile, Chief Economist at Raiffeisen Switzerland, is quoted as saying.

If the prevailing interest rate environment remains unchanged, the tax authorities would also have to reckon with billions in lower revenues for years to come as a result of the reform.

February 2025
Prices for residential property down, rental prices continue to rise

Prices for residential property fell in the first month of this year, SMG Swiss Marketplace Group(SMG) reports in a press release on the latest Swiss Real Estate Offer Index. Specifically, prices for condominiums in January were 0.6 per cent lower than in December 2024. At the same time, single-family homes were even 2.1 per cent cheaper. In contrast, asking rents rose by 0.9 per cent in the same period.

Year-on-year, prices for condominiums were 1.0 per cent higher in January. At the same time, prices for detached houses rose by 1.4 per cent. The average price per square metre for condominiums is currently CHF 8834, according to SMG. For single-family homes, the average price per square metre is CHF 7591.

“Overall, the Swiss property market continues to be characterised by low and possibly falling interest rates,” Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group, is quoted as saying in the press release. The purchase of property is therefore associated with lower financing costs. “However, anyone looking to move into a new tenancy will have to expect price premiums in the coming months due to the tight supply situation,” explains Waeber. The SMG Swiss Marketplace Group brings together the digital marketplaces of TX Group, Ringier and Mobiliar.

February 2025
Key interest rate trend revives property market

The Swiss property market continues to prove resilient despite challenges, CSL Immobilien explains in a press release accompanying its 2025 property market report. Macroeconomic uncertainties and increasing regulatory requirements are cited as such. On the other hand, the gradual reduction in key interest rates by the Swiss National Bank had a positive effect on market dynamics.

In the rental property market, CSL Immobilien continued to see strong demand in the past year with a shortage of supply. As a result, asking rents rose significantly faster than existing rents and the vacancy rate fell to a record low, according to the press release. Due to the particularly sharp rise in asking rents in cities such as Zurich and Geneva, households are increasingly moving to urban centres with good transport links.

Prices for residential property also continued to rise last year. According to CSL Immobilien’s surveys, prices in the Zurich economic area rose particularly sharply.

The office market developed differently in 2024. The supply of available space in the conurbations increased, while rental prices in the periphery fell. In the city centres, on the other hand, rents rose as the supply of space continued to fall. In general, there was increased demand for ESG-compliant office space and flexible utilisation concepts.

CSL Immobilien anticipates moderate but solid further growth for the current year. “Investors who remain agile and adapt their strategies will be able to successfully capitalise on opportunities in 2025,” Thomas Walter, CEO of CSL Immobilien, is quoted as saying in the press release.

February 2025
Abolition of the imputed rental value tax

With the approval of the new federal law by both chambers of parliament, a long-awaited change to the system of residential property taxation has been agreed. The imputed rental value tax, which was considered unsatisfactory and unfair, is now a thing of the past. In future, income taxation of the notional “own rent” for owner-occupied residential property will no longer apply, which will significantly simplify the tax system.

Promoting financial stability and home ownership
Another key point of the new law is the reduction of private debt. The limitation of the deduction for private debt interest and the cancellation of additional deduction options lead to a strengthening of financial stability. Young families benefit from a time-limited debt interest deduction, which makes it easier for them to purchase residential property. This fulfils the constitutional mandate to promote home ownership.

Adjustments to tax deductions
The abolition of imputed rental value tax entails the cancellation of previous deductions such as maintenance costs and insurance premiums in line with the system. At the same time, it is up to the cantons to retain deductions for energy-related renovations or environmental protection measures in order to continue to promote these.

No discrimination against landlords
Private landlords will retain the option of deducting costs such as maintenance or debt interest from their taxes. This will ensure that the new regulation has no negative impact on the letting of private properties.

Constitutional amendment for compensation
The entry into force of the new law is linked to a constitutional amendment. This allows cantons to introduce a property tax for second homes in order to compensate for tax losses on owner-occupied second homes. Tourism cantons in particular should be able to compensate for the financial impact in this way.

January 2025
Strong property market in Aargau shows high prices and low vacancy rates

The latest property barometer from Aargauische Kantonalbank(AKB) attests to the “strong momentum” of the Aargau property market. The canton’s strong appeal as a place to live is reflected in “continued above-average increases in property values”, write the AKB experts in the barometer. Specifically, they noted a 4.6 per cent year-on-year increase in residential property prices.

Among the individual regions of Aargau, Aarau/Seetal stands out with a 5.1 per cent increase in house prices and Rheinfelden/Fricktal with a 6.1 per cent increase in the price of owner-occupied flats. According to the experts’ research, in the majority of the canton’s 230 municipalities, more than CHF 1 million must be paid for a detached single-family home with a neighbouring plot. Prices are even higher in the catchment markets of the surrounding major centres.

The AKB experts have recorded a 4.7 per cent year-on-year increase in asking rents. The average rent for a modern 4.5-room flat is therefore around CHF 2,200 to 2,300 excluding ancillary costs. The vacancy rate across the canton is currently 1.3 per cent.

The property experts at Kantonalbank expect prices for residential property and asking rents to continue to rise in the future. They are basing this forecast on continued strong population growth coupled with a continuing stagnation in construction activity. They also expect further reductions in key interest rates, which will have a positive effect on the return on property investments compared to comparable investments such as government bonds.

November 2024
Property prices in Aargau continue to rise at an above-average rate
The property market in the canton of Aargau continues to record an above-average increase in value. As the latest real estate barometer from Aargauische Kantonalbank shows, prices for residential property have risen by 4.6 per cent and asking rents by 4.7 per cent. “The canton’s strong appeal as a place to live is reflected in sharply rising property values,” say the experts at AKB.

Aarau/Seetal and Rheinfelden/Fricktal in the lead
Particularly significant price increases were recorded in the regions of Aarau/Seetal with a 5.1 per cent rise in house prices and Rheinfelden/Fricktal with a 6.1 per cent increase in condominiums. In most municipalities in the canton, buyers now have to pay more than CHF 1 million for a detached single-family home, and prices are even higher in the catchment areas of the surrounding major centres.

Increased level with falling vacancy rate
The rents on offer have also risen sharply. The average rent for a modern 4.5-room flat is between CHF 2,200 and 2,300, excluding ancillary costs. The canton-wide vacancy rate is comparatively low at 1.3 per cent, which indicates high demand with limited supply.

Prices set to rise further
AKB property experts assume that both residential property prices and asking rents will continue to rise. The reasons for this are:
- Strong population growth in the canton of Aargau
- Stagnating construction activity, which limits supply
- Expected reductions in key interest rates, which will make property investments more attractive
The combination of high demand, limited supply and economic conditions will ensure that the Aargau property market remains dynamic in the future. Both buyers and tenants should be prepared for further price increases.
November 2024
Home ownership is becoming more expensive

Prices for owner-occupied residential property rose in the third quarter of 2024 compared to both the previous quarter and the previous year, Raiffeisen Switzerland reported in a press release on the banking group’s latest transaction price index. “The price momentum on the Swiss owner-occupied property market has not weakened any further recently, so its low point is probably behind us,” says chief economist Fredy Hasenmaile. “The already significantly more favourable financing conditions and the prospect of further interest rate cuts should boost demand for residential property.”

Prices for single-family homes in the quarter under review were 1.6 per cent higher than in the previous quarter. In a year-on-year comparison, the experts at Raiffeisen Switzerland observed an increase of 3.3 per cent. Prices for condominiums were up 0.9 per cent quarter-on-quarter and 2.8 per cent year-on-year.

In a regional comparison, prices for single-family homes in Central Switzerland rose the most year-on-year at 13.7 per cent. Central Switzerland also led the way for condominiums with an increase of 7.9 per cent. By contrast, prices for single-family homes in the Bern and Lake Geneva regions fell by 2.1 and 3.4 per cent respectively year-on-year.

October 2024
Demand for residential property picks up

Raiffeisen Switzerland sees a turnaround in the residential property market. The banking group examined developments on the property market in its study “Real Estate Switzerland – 3Q 2024″. “Demand for residential property has largely recovered following its slump in the wake of the sharp rise in interest rates,” Fredy Hasenmaile, Chief Economist at Raiffeisen Switzerland, is quoted as saying in a Raiffeisen press release on the study. “In addition to the return of the housing cost advantage over renting as interest rates fall again, excess demand is now also spilling over from the rental property market into the owner-occupied property market.”

However, according to the experts at Raiffeisen Switzerland, the resulting increase in supply will not be met by construction activity, but only from existing properties. They therefore expect that the shortage on the residential property market will only be alleviated in the short term. “The more liquid supply and more confident buyers are beginning to be reflected in a higher number of property changes,” explains Hasenmaile. The majority of properties are being sold at the prices desired by the sellers. In the medium term, the chief economist at Raiffeisen Switzerland therefore expects prices to rise more strongly again.

According to the experts, an increasing supply of new buildings is being countered by the densification process, in which new residential buildings are primarily being built in place of old properties. Hasenmaile believes that the vacancy rate on the rental flat market will soon fall below 1 per cent. The increase in annual growth in asking rents to 6.4 per cent in the second quarter of 2024 is also evidence of excess demand.

August 2024
Housing prices develop differently

Anyone looking to buy a condominium had to spend slightly more in July than in the previous month. Specifically, prices for condominiums rose by an average of 0.6 per cent, SMG Swiss Marketplace Group(SMG) reported in a press release on the current Swiss Real Estate Offer Index. The SMG Swiss Marketplace Group combines the digital marketplaces of TX Group, Ringier and Mobiliar.

By contrast, prices for single-family homes fell by an average of 1.1 per cent in July compared to June. This puts the price level at roughly the same level as at the end of 2023, according to the press release. “For many potential buyers, a single-family home is still difficult to afford despite the recent decline,” Martin Waeber is quoted as saying. According to the Managing Director Real Estate at SMG, buying a condominium with a smaller living space is therefore the only alternative for many. According to Waeber, this is leading to a shift in demand with an impact on the prices of both types of residential property.

SMG’s property experts observed a 2.2 per cent decline in asking rents across Switzerland in July compared to June. At 3.7 per cent, this was most pronounced in Ticino. Central Switzerland and the greater Zurich region followed with declines of 3.2 per cent each. The smallest decline in asking rents was recorded in north-western Switzerland with an average of 0.5 per cent.

August 2024
Study on home ownership in Switzerland published

Houzy, the Zurich-based platform for homeowners, has commissioned and published a recent study. According to a press release, the company wanted to collect data on the current and future behaviour of homeowners in Switzerland. Houzy surveyed 80,000 households online for the representative study. 1906 house and apartment owners answered the questionnaire from January to the end of March 2024. Three quarters of them were house owners and one quarter flat owners.

The study focussed on the areas of renovation, heating and energy supply. It revealed that 69.4 per cent of all homeowners used tradesman services in the past year. The average order volume was CHF 15,000.

In addition to renovations, the focus was also on alternative heating systems. 5 per cent of homeowners plan to modernise their heating systems and find alternatives to fossil fuels in 2024. At the same time, 33.5 per cent of households that still use oil and 8.85 per cent of those that use gas want to change their heating systems. One tenth of Swiss homeowners are planning to install solar panels this year in order to produce at least some of the electricity they need themselves.

Another focus was on intentions to sell residential property. A seventh of the homeowners surveyed expressed such intentions. of these, 20 per cent would still like to sell their home in 2024. Extrapolated, this means that 3.2 per cent of all houses and flats in Switzerland will come onto the market this year, according to the press release.

June 2024
UBS does not expect a seller’s market for property

The proportion of the population that can afford a mid-range home has fallen from around 60 per cent to around 15 per cent over the past 20 years, explains UBS in a press release on its Real Estate Focus 2024. Price increases for condominiums and single-family homes are therefore currently being driven mainly by the influx of affluent people from abroad and strong growth in upper incomes. For the current year, the real estate experts at the big bank expect prices for condominiums to rise by 1.5 per cent and for single-family homes by 1.0 per cent. However, UBS estimates that prices should pick up again from 2025 due to lower financing costs, housing shortages and an improved economy.

Prices on the market for office space are expected to stabilise at a low level. According to the press release, prices in prime locations fell by 10 to 15 per cent last year. According to the property experts at UBS, the high interest rates are the reason why the price correction has already been completed.

In the market for multi-family homes, sharp increases in asking rents have so far been able to compensate for the equally increased borrowing costs and the reduced attractiveness of achievable yields. “Accordingly, the purchase prices of apartment buildings have stabilised,” write the UBS experts. They assume that purchase prices will rise again from next year at the latest.

April 2024
Prices for condominiums on the rise

Prices for residential property developed differently in October, the SMG Swiss Marketplace Group reports in a press release on the current Swiss Real Estate Offer Index. The SMG Swiss Marketplace Group brings together the digital marketplaces of TX Group, Ringier and Mobiliar.

Specifically, prices for condominiums rose by 0.7 per cent in October after a pause in September. The experts at SMG Swiss Marketplace Group have observed a year-on-year increase in prices of 2.1 per cent. By contrast, prices for single-family homes were 0.3 per cent lower in October than in September. In a year-on-year comparison, prices were 0.2 per cent lower.

“The continued growth in asking prices for condominiums is remarkable considering that the supply of available condominium units has increased significantly since the beginning of the year,” said Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group, in the press release. “The housing market has also seen a slight increase in the supply of existing properties in recent months, which has contributed to the stabilisation of prices for single-family homes.”

Asking rents rose by 0.4 per cent in October compared to the previous month. A year-on-year increase of 2.7 per cent was observed. The experts at SMG Swiss Marketplace Group attribute the increase to the continuing shortage of supply in the centres.

November 2023
Study on the role of spatial planning in rising housing costs

The study “Causes of rising housing costs in Switzerland with a focus on spatial planning” makes it clear that spatial planning plays a moderating role in the real estate market: it has an impact on construction activity and thus influences housing costs. The increase in demand for housing, on the other hand, is a driving factor in rising housing costs. Among other things, the downsizing of households, population growth and rising individual housing consumption play a role here.

Spatial planning can have an influence here. It limits the availability of building land and zoning capacities. In this way, it controls how flexibly the supply of housing can adapt to changing demand. If spatial planning is too strict, the supply can react less flexibly to the strong increase in demand. This can lead to higher housing costs in the long run.

Internal development as a solution

However, one of the tasks of spatial planning is to limit urban sprawl and protect the landscape. The study identifies inner development as an instrument that allows both the protection of the landscape and an increase in the supply of housing. The study also shows that rezonings have a price-dampening effect in areas where the utilisation of building zones is already high. Upzoning is defined as the expansion of possible uses within a building zone. This is therefore an effective means and, if used in a targeted manner, can have an optimal effect. The study results also suggest a connection between high housing costs and high planning and process costs. Lengthy approval and objection procedures also contribute to increased costs.

Conference on housing and spatial development

As part of the Swiss Housing Days 2023, which will take place from 3 to 7 November 2023 in Biel, a panel of experts will discuss on 6 November how internal development can be shaped so that more affordable housing is created in the process. More details and registration at www.bwo.admin.ch.

October 2023
Home ownership is becoming more expensive

Prices for residential property continued to rise in the second quarter of 2023, theFederal Statistical Office(FSO) informs in a statement. The residential property price index it collects rose by 1.2 per cent quarter-on-quarter and currently stands at 115.9 points. In a year-on-year comparison, the experts at the FSO observed an increase of 2.4 per cent. The base of the index was fixed at 100 points in the fourth quarter of 2019.

Prices of condominiums increased by 1.6 per cent quarter-on-quarter and by 2.1 per cent year-on-year. Single-family homes saw a 0.7 per cent quarter-on-quarter and 2.7 per cent year-on-year increase. The property price index for single-family homes closed the quarter at 117.4 points. Its counterpart for condominiums was slightly lower at 114.6 points.

In the quarter under review, prices for single-family houses rose most strongly in urban communities outside conurbations or in a small conurbation, at 3.4 per cent. In contrast, prices in urban municipalities of large agglomerations and in intermediate municipalities remained largely unchanged compared to the previous quarter. In the case of owner-occupied flats, the FSO experts observed rising prices in all municipality types in a quarterly comparison. The strongest increase, 2.4 per cent, was for condominiums in urban municipalities of a medium-sized agglomeration.

August 2023
Höhn + Partner AG moves into the future: Newly founded Hoehnpartner AG

In the split-off and newly named company Hoehnpartner AG, the services of an architectural office and a total contracting company continue to be offered. The remaining part of the business of Hoehn + Partner AG will henceforth concentrate on property trading.

The newly founded Hoehnpartner AG is a medium-sized company specialising in the construction of residential property. It has emerged from the many years of experience and expertise of Hoehn + Partner AG, which was active in the fields of architecture, total contracting as well as project development and financing. In order to meet current market requirements, the decision was made to reorganise the company, with architecture and total contracting working even more closely together. The focus is on the development, design and implementation of residential building projects, with a small proportion of commercial buildings also being included. Höhn + Partner AG will take a back seat.

The existing management team will remain on board, while young employees will be given the opportunity to develop and advance. Hoehnpartner AG strives for continuous renewal with its own and grown resources in order to meet the demands of the market. In doing so, flexibility is strived for while maintaining the same level of quality. Most of the approximately 25 employees from the areas of architecture, project and construction management are now transferring to the new Hoehnpartner AG.

June 2023
Owner-occupied housing market shows cooling

The market for residential property is not impressed by inflation and the turnaround in interest rates, writes Raiffeisen Switzerland in a press release on the current edition of its “Immobilien Schweiz” study. According to the banking group’s surveys, prices for single-family homes in the second quarter were 6.1 per cent higher than in the previous year. Prices for condominiums rose by 7.5 per cent in the same period.

Now, however, there are signs of a cooling of the market, writes Raiffeisen. Specifically, the experts of the banking group observe a slow closing of the gap between supply and demand. “However, it will probably not be enough for more than a weakening of the price dynamics on the owner-occupied housing market,” Martin Neff predicts in the press release. according to the chief economist of Raiffeisen Switzerland, “major price declines or even a crash” are unlikely: “The signs on the owner-occupied housing market point to a soft landing.”

In the rental housing market, on the other hand, Raiffeisen sees rising demand and an increasingly scarce supply. In view of dynamic immigration and stagnating construction activity, there is no relief in sight. “In the environment of rising construction prices, increased financing costs, ever higher administrative hurdles and significantly increased opportunity costs, the signs of heating up are not enough to sufficiently increase the attractiveness of new construction projects,” says Neff. He expects an “acute housing shortage” already observed in various regions to spread to other regions.

May 2023
Home prices resilient despite sharpest interest rate rise in 30 years

Prices for residential property increased again in nominal terms in 2022 despite the strongest rise in interest rates for 30 years, although much less strongly than in the previous year. In the case of single-family houses, prices increased by an average of 4 percent last year, which was significantly below the previous year’s value of 9 percent. In the same period, prices of condominiums increased slightly by 5.7 per cent – again, less markedly than in 2021, which equalled an increase of 8.3 per cent. However, a closer look at the four regions of Switzerland with the most transactions (purchases and sales of single-family houses and condominiums) – Zurich, Northwestern Switzerland, Bern, Lake Geneva – reveals a differentiated picture: Adjusted for inflation, only half of the regions still show a price increase for either single-family houses or condominiums.

The analysis by Homegate and ImmoScout24 together with the Swiss Real Estate Institute is based on the effective sales prices of the Swiss Real Estate Data Pool. This includes the owner-occupied properties financed by Credit Suisse, UBS and Zürcher Kantonalbank and covers around 40 percent of all transactions in Switzerland. In 2022, around 7,200 sales of owner-occupied homes were registered in the regions surveyed. As in the previous year, this represents a decline of around 10 percent compared to 2021, although in contrast to the previous year, this was largely reflected in the number of condominiums sold.

Martin Waeber, Managing Director Real Estate, SMG Swiss Marketplace Group, sees the reasons for the slowdown in price increases primarily in the sharp increases in key interest rates and the resulting rise in mortgage rates, as well as a declining effect of home offices compared to 2021: “The dampening effect of rising interest rates on the development of home prices predicted at the beginning of 2022 has been confirmed, albeit to a lesser extent than might have been expected. However, home prices seem to have slowly reached their zenith. Apart from the fact that many people simply can no longer afford to buy their own home at current prices, the declining use of home offices has also led to a decline in the valuation of the work situation within one’s own four walls. Both factors dampened the price increase in the course of the past year. However, in view of the scarcity of land and the continuing influx into Switzerland, a real estate bubble is not to be expected in this country, Waeber continues. This is especially true since properties for sale are still very popular, especially in places like Geneva and Zurich.

Single-family homes in the Lake Geneva region more than 70 percent more expensive than in the Bern region
With strong price growth of 9.3 percent, prices for single-family homes in the Zurich region increased the most in 2022 – and this was even the only region with a higher price increase than in 2021 with an increase of 7.7 percent. The average single-family home cost CHF 1.53 million. As a result, the Zurich region increasingly caught up with the Lake Geneva region, which remained the most expensive: the gap to the average single-family home price in the Lake Geneva region narrowed by CHF 80,000, or 28 percent, compared to the previous year. In the Lake Geneva region, an average property cost CHF 1.74 million in 2022, 3 per cent more than in 2021. In the Bern and Northwestern Switzerland regions, average property prices for single-family homes also converged somewhat, with prices in the Bern region recording an increase almost twice as high (6.3 per cent to CHF 1.02 million) as in the Northwestern Switzerland region (3.6 per cent to CHF 1.14 million). Taking into account last year’s inflation, this results in only a minimal price increase of 0.8 per cent for northwestern Switzerland. Nevertheless, Bern remains the cheapest region to buy a single-family home.

Condominiums in the Lake Geneva region almost as expensive as in the Zurich region
In the case of condominiums, growth in the Zurich region for 2022 was restrained at 3.7 per cent, especially compared to that of single-family homes. Nevertheless, properties in this region remain the most expensive of all four regions analysed, averaging CHF 1.12 million. Due to a considerable price increase in the Lake Geneva region of 12 percent compared to 2021, the difference to the front-runner narrowed significantly (from CHF 120,000 to CHF 40,000). The Bern region continues to be by far the cheapest for potential buyers of condominiums. Average prices here rose by only 2.9 per cent to CHF 0.7 million last year. Taking inflation into account, this region can even be said to have stagnated. In addition to the Lake Geneva region, the second cheapest region – northwestern Switzerland – was also unimpressed by rising interest rates and the declining trend towards home offices: prices rose by 7.9 per cent in 2022, even more than in the previous year (5.6 per cent). At CHF 820,000, an average condominium now costs CHF 60,000 more than in 2021.

With a view to the property prices per square metre of net living space, an additional effect is particularly evident for the Lake Geneva and Zurich regions. In the Zurich region, prices per square metre rose significantly faster than property prices in the same period. This indicates falling residential areas of the traded properties. In the Lake Geneva region, on the other hand, the opposite was true, i.e. property prices rose five percentage points more than prices per square metre. Thus, larger properties tended to be sold on the market in the Lake Geneva region for 2022 than in 2021.

The cheapest houses are in Aarburg, the most expensive in Uetikon am See*
Not surprisingly, of the five municipalities with the highest median prices for single-family houses, three came from the Zurich region. The most expensive are in Uetikon am See (CHF 4.0 million), followed by Kilchberg (CHF 3.68 million) and Meilen (CHF 3.41 million). These are followed by two municipalities in the Lake Geneva region, Vésenaz (CHF 3.06 million) and Nyon (CHF 2.98 million). Two findings are worth noting: firstly, all five of the most expensive municipalities for single-family homes were not listed last year; secondly, prices in this highest segment have risen significantly once again. In the case of the highest median prices for condominiums, all five municipalities even came from the Zurich region: led by Küsnacht (CHF 2.52 million), Zumikon, Herrliberg and Meilen (CHF 2.3 million each) and Erlenbach (CHF 2.16 million).

On the other side of the scale, the cheapest residential properties in the four regions surveyed – for both single-family houses and condominiums – all come from the canton of Aargau. Depending on the municipality, condominiums are priced from CHF 400,000 (Klingnau), while single-family homes could be purchased last year from CHF 610,000 (Aarburg). This shows impressively: for the price of a condominium in Küsnacht in Zurich, there are six to buy in Klingnau, less than 35 kilometres away. And almost seven single-family homes – or a complete apartment building – can be bought in Aarburg for the price of one in Uetikon am See. These two places are also just 60 kilometres apart as the crow flies.

Summing up the results of the latest Home Market Price Analysis, Peter Ilg, head of the Swiss Real Estate Institute, is amazed at how robust price growth is in the owner-occupied home market: “After nine years of negative interest rates, the turnaround in interest rates came abruptly last year with several key rate hikes totalling 1.75 percentage points. For the first time in more than 30 years, the SNB has raised the key interest rate so significantly within one year.” Falling home prices in Switzerland would therefore not have surprised Ilg at this turn of events – combined with a trend towards a decline in the use of the home office. “Nevertheless, I am amazed at how robust the price growth in the owner-occupied home market is: In three of the eight segments examined, price growth was even significantly higher than the previous year despite this headwind,” Ilg said, summarising the findings of the Home Market Price Analysis for 2022.

March 2023
Housing is becoming noticeably more expensive for everyone

The increased interest burden has so far had no effect on the demand for one's own four walls. According to a press release on immoscout24.ch , those interested in buying their own homes are “still in a buying mood”. The data presented there is based on the Real Estate Offer Index . It is collected by the SMG Swiss Marketplace Group in cooperation with the real estate consulting company IAZI . Immoscout24.ch is an SMG marketplace.

According to this, the price expectations on the supplier side have not reduced despite the increase in the key interest rate by 0.5 percentage points. Detached houses cost 2 percent more, condominiums were advertised within a month at 0.7 percent higher prices. "With the increased interest burden and the general increase in costs for maintenance and investments, living in your own home is becoming noticeably more expensive," Martin Waeber is quoted as saying by SMG. Accordingly, a slowdown in price development is likely.

Advertised rental prices also increased slightly last month by 0.3 percent. In addition, the significantly higher oil and gas prices would lead to "significantly higher expenses".

Demand for investment properties could fall among institutional investors. This may result in reduced construction activity and thus a shortage in the supply of rental apartments. It remains to be seen how asking rents will develop in the long term.

August 2022
Houzy doubles the number of users

Houzy is growing rapidly. Recently the 100’000. Apartment owners are registered on the platform of the same name from the young PropTech company from Zurich, writes Houzy in a statement . Just a year ago, the start-up founded in 2017 reported that its users had increased to 50,000. The number of houses and apartments digitally recorded on the platform increased from 70,000 to 144,000 in the same period.

Data is intelligently linked on the Houzy platform and recommendations for homeowners are derived from it. For example, it can be calculated there when the heating system should be renovated and how much money should be put aside for it. Houzy also offers a real estate appraisal. Free advice is also available to registered users.

In the past few weeks, the company has revised its platform and integrated new digital tools, explains Houzy. In concrete terms, homeowners can now check the demand for their property, optimize the corresponding sales price and calculate the real estate gains tax for all Swiss cantons. Houzy emphasizes the platform’s new property search function as the most important innovation. All major real estate platforms would be searched here and the advertisements would be supplemented with “valuable additional information”. As examples of such additional information, a neutral market value estimate as well as energy efficiency, energy saving and solar potential and the need for refurbishment of the property are given in the notification.

July 2022