The trends in the Swiss real estate market are currently so strong and clear that the Property Owners Association is tempted to take a look into the crystal ball. So, what are the trends for 2025?
Falling mortgage rates: Fixed-rate mortgages are once again below 1%, and the trend toward even lower rates will continue. The Swiss National Bank has recently not ruled out a return to negative interest rate policies, which will particularly benefit SARON mortgages.
Rising mortgage margins: The downfall of Credit Suisse has led to significantly less competition among banks, and they have already noticeably increased their margins. This unpleasant trend for mortgage borrowers may continue into 2025 and is only masked by the falling mortgage rates.
Rising property prices: After two calm years with relatively stable prices, the price surge will intensify in 2025. Low mortgage rates, high immigration, and large area demands meet a limited supply—an ideal mix for higher property prices.
Return of the investment shortage: The yield on Swiss federal bonds is approaching 0% again, and there is hardly any interest on bank accounts. Accordingly, investors are looking for alternative investments and are finding success with Swiss income properties. This effect will lead to significantly rising prices for both direct and indirect real estate investments (real estate funds, real estate stocks, private equity real estate) in 2025.
