House prices were up by 0.61% during the year to Q2 2020

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 rose slightly by 0.61% during the year to Q2 2020, an improvement from the previous year’s 2.52% drop and the first y-o-y growth since Q2 2017. During the latest quarter, prices fell slightly by 0.16% q-o-q.

The property market’s slowdown in recent years 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. Switzerland's economy grew a minuscule 0.9% in 2019 from a year earlier, sharply down from an expansion of 2.8% in 2018 and the weakest performance in a decade, according to the State Secretariat for Economic Affairs (SECO). The SECO projects that the economy will shrink by about 6.2% this year, the worst downturn in 25 years, as foreign trade and consumer spending plunge due to the COVID-19 pandemic.

In response, the Swiss government introduced an economic stimulus package worth CHF 65 billion (€ 60.5 billion) to help companies hit by the pandemic. It is the biggest in the country’s history.