Trend: house prices fell by 2.56% y-o-y in 2018

After about 15 years of uninterrupted house price rises, the Swiss government’s efforts to cool Switzerland’s overheated property market have finally succeeded. House prices dropped 2.56% y-o-y in 2018, from an annual decline of 1.7% in 2017, and rises of 1.39% in 2016, 3.02% in 2015, 1.91% in 2014, 2.54% in 2013 and 4.29% in 2012. During the latest quarter, prices dropped 0.23% q-o-q.

Analysis: The property market’s slowdown can be attributed to the Swiss National Bank’s stricter lending criteria, designed to lower housing debt (currently 90% of all household debt). The decision of the central bank to abandon its cap against the euro in 2015 also made Swiss real estate more expensive for foreign investors, thereby reducing demand.

A surplus of close to 9,000 rented residential properties is expected this year, according to Wüest and Partner.

Rents, rental yields: yields are lowish, at around 3.27% 

Zurich apartments are expensive, at around €11,467 per sq. m. 

Switzerland: city centre apartment, buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Zurich € 1,446,840 € 3,946 3.27%

Recent news. The Swiss economy grew by about 2.6% last year, following annual expansions of 1.7% in 2017, 1.6% in 2016, 1.3% in 2015 and 2.5% in 2014. Economic growth is projected to slow to 1.5% this year, amidst weak domestic demand, according to the State Secretariat for Economic Affairs (SECO).