House prices fell by 1.15% y-o-y in 2019

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 1.15% during 2019, its third consecutive year of modest y-o-y declines. During the latest quarter, prices increased slightly by 0.89% q-o-q.

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.

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

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

Switzerland: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Zurich € 1,446,840 € 3,946 3.27%
Geneva € 1,377,120 € 3,827 3.33%

Recent news. The Swiss economy was estimated to have expanded by a mere 0.9% last year, sharply down from the prior year’s 2.8% growth, amidst weak domestic demand. In fact, it was the lowest growth in a decade. The economy is projected to expand by 1.3% this year and by another 1.6% in 2021, according to the International Monetary Fund (IMF).