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UBS Real Estate Market Study
Price developments on the real estate market
Development of real estate prices in Switzerland: What are the forecasts for the real estate market? Which factors are decisive?
Content:
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: The UBS 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.
Home prices rose by 0.6% in 4Q24. Compared to the previous year, they were up 2.4%, and after adjusting for inflation, the gain was 1.8%— slightly above the long-term average.
By the end of 2024, existing rents and offered rents were 3.3% and 2.3% higher, respectively, than a year earlier. Momentum in rental prices, however, has slowed considerably. Offered rents dipped slightly quarter over quarter, and the quarterly increase in existing rents was roughly half of what it was in summer 2024.
UBS Swiss Real Estate Bubble Index in the 4th quarter of 2024: moderate
UBS Swiss Real Estate Bubble Index in the 4th quarter of 2024: moderate
The UBS Swiss Real Estate Bubble Index continued to decline in 4Q24, reaching 0.29 index points. According to the index, the risk of a real estate bubble remains moderate.
Low ownership costs relative to renting, subdued mortgage demand, and a further slowdown in construction activity make a pronounced price correction increasingly unlikely.
What is the UBS Real Estate Bubble Index and how is it calculated?
What is the UBS Real Estate Bubble Index and how is it calculated?
The UBS 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. UBS economists use a model with different subindices to calculate the bubble index:
- 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 current index value, the real estate bubble risk is divided into the following four categories:
- low (below 0)
- moderate (between 0 and 1)
- elevated (between 1 and 2)
- acute (above 2)
What is the forecast for the development of the real estate market in Switzerland?
What is the forecast for the development of the real estate market in Switzerland?
Because of significantly improved financing conditions, the pace of home price increases is expected to accelerate in the coming quarters. The demand index—the number of active property searches for owner-occupied homes—was more than 20% above its prior-year level in December 2024. Home prices are projected to rise by about 3-4% this year.
The map shows price developments over the last five years for all 106 Swiss economic regions, as well as an indication of regional risk based on the development of the price-to-income and price-to-rent ratios.
- In German-speaking Switzerland, we see high imbalances in the Limmattal region and now also in the Einsiedeln region. There is also a newly elevated imbalance in the Pfannenstiel region. Generally, in the local primary housing markets of German-speaking Switzerland, the ratio of purchase prices to rents has only increased below average across the board.
- In Western Switzerland, imbalances are primarily found in the canton of Vaud, where prices have decoupled from rents and incomes above average since the third quarter of 2019. In the Geneva region, there is no longer an elevated imbalance, as the recent price development has been below average.
- High imbalances exist as a result of the second home boom in the tourist regions of Graubünden. In the mountain regions of Central Switzerland, the imbalances are elevated.
The facts about your preferred municipality
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 UBS municipality guide is free of charge and answers all your questions.
FAQ real estate prices and real estate market
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