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The Swiss property market is experiencing significant price growth in 2025, with apartment prices rising 2.4% to 4.2% nationally and Zurich leading with 12.5% year-on-year increases. Mortgage rates have dropped to historic lows at 1.25%, creating favorable financing conditions despite strict lending criteria that require 20% down payments and housing costs not exceeding 33% of gross income.
Rental yields remain modest at 2.5-2.9% across major cities, while foreign buyer restrictions under Lex Koller laws are tightening further with new regulations planned for 2025. The market shows persistent undersupply with record-low vacancy rates and construction permits declining 13% year-on-year, supporting continued price appreciation forecasted at 3-4% for 2025.
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Swiss property prices have risen 1.8-4.2% in the past 12 months, with Zurich apartments up 12.5% and mortgage rates at historic lows of 1.25%.
The market shows persistent undersupply with strict lending criteria requiring 20% down payments, while experts forecast continued 3-4% price growth through 2025.
| City | Price per m² (CHF) | Annual Change | Rental Yield |
|---|---|---|---|
| Zurich | 18,909 | +12.5% | 2.59-2.64% |
| Geneva | 20,960 | +3.51% | 2.54% |
| Lausanne | 12,000+ | +0.26% | 2.94% |
| Basel | 13,090 | -0.08% | ~2.8% |
| National Average | 7,587 | +1.8-3.7% | 2.5-2.9% |
Fact-checked and reviewed by our local expert
Laurence Rapp 🇬🇧
Sales representative at Skiing Property
How much have Swiss property prices changed in the past 12 months?
Swiss property prices have increased significantly across all segments in the past 12 months as of September 2025.
House prices rose between 1.8% and 3.7% year-on-year in Q2-Q3 2025, while apartment prices experienced stronger growth at 2.4% to 4.2% depending on the source and market segment. Detached house prices increased 3.1% nationally to reach approximately CHF 7,683 per square meter, while condominiums hit CHF 8,980 per square meter.
The strongest price appreciation occurred in major urban centers, with Zurich leading the charge at 12.5% year-on-year growth for apartments. Geneva followed with 3.5% growth, while Lausanne saw modest increases of 0.26% and Basel remained roughly flat with a slight decline of 0.08%.
This upward trend reflects persistent undersupply conditions, robust demand from both domestic and international buyers, and historically low mortgage interest rates that have improved affordability for qualified buyers.
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What are current property prices per square meter in major Swiss cities?
Swiss property prices per square meter vary significantly between major cities, with Geneva commanding the highest prices and Lausanne offering relatively more affordable options.
| City | Apartment Price (CHF/m²) | House Price (CHF/m²) | 12-Month Change |
|---|---|---|---|
| Geneva | 20,960 | 20,960 | +3.51% |
| Zurich | 18,909 | 21,110 | +12.5% |
| Basel | 13,090 | 13,090 | -0.08% |
| Lausanne | 12,000+ | 15,490 | +0.26% |
| National Average | 8,980 | 7,683 | +2.4% to +4.2% |
How quickly are properties selling and what's the current time on market?
Properties are selling faster in 2025 compared to the previous year, with national time on market shortened across most segments.
Transaction volumes are recovering strongly, supported by lower mortgage interest rates and persistent demand from buyers who delayed purchases during the higher rate environment of 2023-2024. The Swiss residential market is experiencing increased liquidity as more buyers enter the market taking advantage of the 1.25% reference mortgage rate.
Time on market has shortened particularly in tight-supply cities like Zurich and Geneva, where well-priced properties in desirable locations are receiving multiple offers. Basel and Lausanne markets are also showing improved transaction speeds, though not as dramatic as the two largest cities.
The faster sales pace reflects both improved buyer confidence due to lower financing costs and the ongoing shortage of available inventory, creating competitive conditions that favor sellers.
What are current mortgage interest rates and how do they compare to last year?
Swiss mortgage interest rates have dropped to historic lows in 2025, creating the most favorable financing environment in years.
The Swiss reference mortgage rate fell to 1.25% as of September 2025, representing a significant decrease from previous years. Ten-year fixed-rate mortgages are commonly available below 1.5%, while SARON-based variable rate offers are around 0.7% for qualified borrowers.
This represents a substantial improvement compared to 2023 when rates peaked above 2.5% during the interest rate hiking cycle. The current rate environment has improved affordability calculations for buyers, as lower rates reduce monthly payments and increase borrowing capacity under the 33% affordability rule.
Banks are offering competitive rates to attract qualified borrowers, though lending standards remain strict despite the lower rate environment. The combination of low rates and tight credit standards is creating a market where well-qualified buyers have significant advantages.
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How strict are banks with down payment requirements and affordability checks?
Swiss banks maintain very strict lending criteria despite the favorable interest rate environment, with rigid down payment and affordability requirements.
The minimum down payment requirement is 20% of the property value, with at least 10% required to come from cash savings or pension funds (pillar 2 and 3a). The remaining 10% can be borrowed against pension assets, but banks verify the source and sustainability of all funds.
Housing costs including mortgage payments, amortization, and maintenance must not exceed 33% of gross household income. Banks calculate this using a theoretical interest rate of typically 5% regardless of the actual mortgage rate, ensuring borrowers can afford payments if rates rise significantly.
Basel III reforms implemented in January 2025 brought stricter capital requirements for banks, leading to increased focus on borrower risk assessment and more thorough income verification. Banks are particularly cautious with self-employed borrowers and those with variable income sources.
Foreign residents face additional requirements including proof of residence permits, local employment or business ties, and often higher down payment requirements depending on their status under Lex Koller regulations.
What are current rental yields in major Swiss cities?
Rental yields in Swiss cities remain modest, reflecting the high property purchase prices relative to rental income potential.
| City | Gross Rental Yield | 1-Bedroom Yield | 2-Bedroom Yield |
|---|---|---|---|
| Lausanne (Vaud) | 2.94% | 3.04% | 2.86% |
| Basel | ~2.8% | 2.75% | 2.85% |
| Zurich | 2.59-2.64% | 2.64% | 2.64% |
| Geneva | 2.54% | 2.49% | 2.77% |
| National Average | 2.5-2.9% | 2.6% | 2.7% |
Net yields after deducting maintenance, management, insurance, and tax obligations typically range from 1.5% to 2%, making buy-to-let investments challenging from a cash flow perspective but potentially attractive for long-term capital appreciation.
Are there signs of oversupply or undersupply in the Swiss housing market?
The Swiss housing market shows clear signs of persistent undersupply across all regions, with no evidence of oversupply in any major market segment.
National residential vacancy rates have reached historic lows, with new building permits dropping 13% year-on-year in 2024-2025. Construction activity continues to trail demand by tens of thousands of units annually, creating a structural shortage that supports continued price appreciation.
Urban markets like Zurich and Geneva show the most acute undersupply conditions, where demand from population growth, immigration, and wealth accumulation far exceeds new construction delivery. Even secondary cities and rural areas are experiencing tight inventory conditions.
The construction industry faces challenges including high labor costs, complex zoning regulations, and lengthy approval processes that limit the speed of new supply delivery. Environmental regulations and land use restrictions further constrain development potential in many desirable locations.
This undersupply situation is expected to persist through 2025-2027, providing fundamental support for property values even if economic conditions weaken or interest rates rise moderately.
What do experts predict for Swiss property prices in the next 12 to 24 months?
Real estate experts forecast continued price appreciation in the Swiss property market through 2025-2027, though at a moderating pace as affordability pressures mount.
Property prices are expected to rise 3-4% in 2025, then slow to 2-3% annual growth in 2026-2027 as the market adjusts to higher price levels relative to incomes. Major cities like Zurich and Geneva may see slightly higher appreciation due to persistent undersupply and international demand.
A significant price correction is considered unlikely due to demographic drivers including population growth, wealth accumulation, and immigration of high-net-worth individuals. The structural lack of new supply provides a floor for price declines even in economic stress scenarios.
Experts note that while price growth may moderate, the Swiss market's stability and quality make it attractive for long-term investors. The combination of political stability, currency strength, and limited land availability supports premium valuations compared to neighboring countries.
Risks to the forecast include potential economic recession, significant interest rate increases, or major changes to foreign buyer regulations that could reduce demand from international investors.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Switzerland versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How has foreign buyer activity changed since last year?
Foreign buyer activity in Switzerland is increasingly constrained by Lex Koller regulations, with new government proposals in 2025 seeking to further restrict non-resident purchases.
Current foreign buyer activity remains limited to specific categories including EU residents with valid permits, investors in commercial properties, and buyers of designated second homes in tourist areas. The government has maintained strict enforcement of existing rules while preparing additional restrictions.
New legislative drafts planned for 2025 aim to tighten foreign buyer restrictions with stricter prerequisites and reduced exemptions. These changes specifically target second home purchases and non-resident investments, potentially reducing international demand in popular regions.
Despite these restrictions, qualified foreign buyers continue to find opportunities in the Swiss market, particularly high-net-worth individuals relocating for business or lifestyle reasons. The luxury segment remains active with international buyers seeking premium properties in Zurich, Geneva, and resort areas.
It's something we develop in our Switzerland property pack.
What new government regulations are affecting property purchases right now?
Several new government regulations and policy changes are impacting Swiss property purchases in 2025, affecting both foreign and domestic buyers.
Stricter Lex Koller enforcement for foreign buyers represents the most significant change, with legislative drafts planned to further limit purchases by non-residents. New rules will particularly affect second home acquisitions and investment properties, requiring more stringent proof of primary residence and business ties.
Basel III banking reforms implemented in January 2025 require banks to hold more capital for mortgage lending, potentially tightening credit availability and increasing scrutiny of borrower qualifications. Banks must maintain higher reserves, leading to more conservative lending practices.
Discussions are ongoing about abolishing the imputed rental value tax regime for owner-occupiers, which would significantly change tax planning for property buyers and current owners. This change could reduce the tax burden on homeowners while affecting investment property economics.
Additional regulatory discussions include potential changes to foreign investment rules in specific cantons and modifications to wealth tax calculations that could affect property holding strategies for high-net-worth individuals.
How do Swiss property prices compare to neighboring countries?
Swiss property prices significantly exceed those in neighboring countries, positioning Switzerland as the most expensive European real estate market.
| Country | Average Price/m² (2025) | Major City Range | Price Premium vs Switzerland |
|---|---|---|---|
| Switzerland | CHF 7,587 | CHF 14,000+ urban core | Base (100%) |
| France (Paris) | €9,562 | €3,017-13,374 | -20% to -30% |
| Germany (Berlin) | €5,200-8,200 | €6,000+ top cities | -40% to -50% |
| Austria | €5,000-8,000 | €10,000 core Vienna | -35% to -45% |
| Italy (North) | €4,500-7,500 | €8,000+ Milan | -45% to -55% |
Swiss prices are particularly elevated in Zurich and Geneva, where costs can exceed those in Paris, London, or Munich by significant margins. This premium reflects Switzerland's economic strength, currency stability, limited land availability, and high quality of life standards.
What tax implications should buyers consider when purchasing Swiss property now?
Swiss property buyers face several tax considerations that vary by canton and buyer residence status, with recent policy discussions potentially changing the landscape.
Transaction costs including notary fees and transfer taxes typically range from 2-4% of the purchase price, varying significantly by canton. These costs are generally lower than many European countries but should be factored into total acquisition costs.
The imputed rental value system currently requires owner-occupiers to declare a theoretical rental income for tax purposes, even when living in their own property. This system is under political review and may be abolished, which would reduce the tax burden on homeowners significantly.
Property taxes in Switzerland are relatively low compared to other developed countries, but wealth taxes apply in most cantons and can affect high-value property holdings. Capital gains taxes apply on property sales, with rates decreasing based on holding period.
Rental income from investment properties is fully taxable and must be declared annually. Non-resident property owners face different tax rates and may be subject to withholding taxes, requiring careful planning to optimize tax efficiency.
It's something we develop in our Switzerland property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
The Swiss property market in September 2025 presents a complex landscape of opportunities and challenges for potential buyers and investors.
Strong fundamentals including persistent undersupply, historic low interest rates, and continued economic stability support the market, though high prices and strict lending requirements create barriers for many buyers, making careful research and professional guidance essential for successful property acquisition.
Sources
- RealAdvisor - Swiss Property Prices
- SwissInfo - Property Prices Continue to Climb
- UBS - Real Estate Market and Prices
- Global Property Guide - Switzerland Price History
- Le News - Swiss Reference Mortgage Rate
- SwissInfo - Interest Rate Falls to 1.25%
- Global Property Guide - Switzerland Rental Yields
- PCC Wealth - How to Buy Property in Switzerland
- Jacquemoud Stanislas - Stricter Rules for Foreign Investors
- LuxToday - Most Expensive Real Estate EU