Where Experts Still See Buying Opportunities—and What You Need to Keep in Mind Now

Real estate prices in Switzerland are once again on the rise, prompting potential buyers to act swiftly. Frank Meierhofer, a real estate expert with Swiss Life, attributes this upward trend to two significant factors: persistently low interest rates and a notable shortage of housing. For those considering purchasing a home, delaying the decision may not be wise.

Many individuals in Switzerland are contemplating the prospect of homeownership, driven by the desire for additional living space or the chance to escape the cycle of paying rent. Despite recent discussions regarding a slowdown in the real estate market, prices are already climbing. Meierhofer explains, “There are various factors at play here,” noting the current environment of extremely low interest rates as a key contributor. The Swiss National Bank (SNB) has maintained its key interest rate at 0 percent, making mortgages appealing for potential homeowners. However, Meierhofer warns that this favorable situation may not last long.

He projects that while interest rates will likely remain unchanged through the first quarter of 2027, a potential increase of 0.25 percentage points could follow. This forecast is based on his analysis, as the SNB has not confirmed any changes to interest rates as of September. The bank’s current inflation predictions are based on the assumption that rates will stay at 0 percent.

Another significant factor driving up real estate prices is the longstanding issue of insufficient housing availability. Meierhofer points out that many regions are witnessing construction levels that fall short of demand. Challenges such as lengthy approval processes, objections, a lack of available land, and rising construction costs are hindering the development of new properties.

This shortage not only limits the supply of homes for sale but also exacerbates the scarcity of affordable rental options. Meierhofer believes this situation may further motivate individuals with adequate financial resources to seek homeownership. Official statistics corroborate that homeownership is becoming increasingly costly. The Federal Statistical Office reported that the residential real estate price index increased by 1.5 percent in the first quarter of 2026 compared to the previous quarter, and prices were up 4.7 percent year-over-year. Condominiums have experienced a more significant price surge than single-family homes, despite a brief period of stagnation in September.

Meierhofer advises prospective buyers to act without delay. “If you’re interested in buying a property or have been considering homeownership for some time, you should buy by the end of the year,” he states, reasoning that rising interest rates in 2027 will lead to higher financing costs.

However, potential buyers must first qualify for a mortgage. Typically, banks finance up to 80 percent of the purchase price for owner-occupied homes, meaning buyers need to contribute at least 20 percent of their own funds. Furthermore, at least half of this must come from “hard” equity, which cannot be sourced from pension funds.

Even those with sufficient savings face challenges, as banks have adopted a more stringent approach to lending. They now conduct thorough assessments of what is termed “affordability,” and if a borrower’s income is slightly below the required threshold, financing is more likely to be denied compared to previous years when banks might have been more lenient.

The search for suitable properties varies significantly by location. Meierhofer notes that large urban areas and economically robust regions, such as Zurich, Zug, Baar, Lucerne, Schwyz, and Geneva, present the greatest challenges for buyers. Conversely, those willing to consider different locations may find better opportunities. For instance, he mentions that more affordable properties can be found in the Zurich Oberland and in cantons like Glarus or Jura.

Currently, Meierhofer observes a trend favoring demand for single-family homes over condominiums. The typical homebuyer today is generally aged between 35 and 45, a demographic often seeking more space for growing families. However, this group faces a competitive housing market, which Meierhofer rates as a “6.5 to 7” on a scale of ten where ten signifies a precarious situation. Regional disparities exist, but young families, especially those transitioning from dual incomes to a single income after the birth of a child, face particular difficulties.

Meierhofer advises those aspiring to homeownership to start saving as early as possible. “If that’s what you want, then of course, the sooner, the better,” he emphasizes. Nevertheless, the decision to purchase should always be considered on an individual basis.

He also highlights that the challenges extend beyond purchasing prices. Renters are increasingly affected by the housing shortage as well. Developers face high land and construction costs and often endure lengthy waits for permits, compounded by objections and stricter regulations. These delays ultimately lead to increased expenses, which may be passed on to tenants in the form of higher rents.