House prices in Switzerland set to fall in 2018

Home ownership in Switzerland is becoming more affordable as the cost of houses and apartments continues to fall.

House prices in Switzerland set to fall in 2018
Photo: elxenelze/Depositphotos

Over the past year the cost of residential apartments fell by 4 percent, according to the Swiss Real Estate Offer Index.

The cost of single-family houses also fell, but by a more moderate 0.8 percent.

Property prices reached their lowest level in December, the index shows.

An apartment in Switzerland cost 6,900 francs per square meter in December, down from 7,350 francs in July.

According to Martin Waeber, the director of real estate company ImmoScout24 that compiles the index, the falling prices are explained in part by low interest rates and a high level of vacant properties.

Waeber said these factors would continue to play an important role in the first few months of 2018.

But Waeber was sceptical that the falling prices would lead to a big jump in property ownership as banks continue to set the bar high when it comes to mortgages.

Rental property prices also fell in 2017, according to the index.

The 1.2 percent drop in rental prices brought them to a level last seen in August 2015.

But price developments in the rental market varied considerably depending on the region, the index shows.

In the Lake Geneva region prices rose by 1 percent and in Zurich they increased by 0.4 percent over the year.

In central Switzerland rental prices fell by an above average 1.6 percent, and in Ticino there was a 2.8 percent decrease.

“Less immigration and increased construction could continue to benefit renters,” Waeber said.

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In which Swiss canton can you find a rental bargain?

The cost of renting an apartment in Switzerland varies largely from canton to canton. Here's where you might find a bargain.

In which Swiss canton can you find a rental bargain?
Sign on this Swiss building says "for rent." Photo: FRED DUFOUR / AFP

Rented accommodations are most expensive in the Swiss canton of Zug, according to a study by the Federal Statistical Office (FSO).

Average monthly rents for a three-to-four room property in the tiny canton, which is home to dozens of multinational companies, is 1,883 francs.

Due to its low tax rate, Zug is a major target for millionaires – with the most per capita in Switzerland.

READ MORE: Which Swiss canton has the most millionaires?

Average monthly rents for a three to four room property in the two cantons ranged between 1,486 and 1,508 francs in 2019.

In the second place is the canton of Zurich (1,663 francs per month), followed by Schwyz (1,612 francs) and Nidwalden (1,553 francs).

Geneva and Vaud are next on the list, with average monthly rents of 1,508 francs and 1,486 francs, respectively.

Where can I find a cheap rental deal?

In contrast, the same size apartment in Jura costs 967 francs — the lowest rate in Switzerland — and 1,000 in Neuchâtel.

The Swiss average for a three to four-room dwelling is 1,362 francs, the OFS reported.

READ MORE: Reader question: How do I challenge my rent in Switzerland? 

This chart shows how your canton rates in terms of rents.

For most tenants in Switzerland — 62 percent — the monthly rent ranged between 1,000 and 1,999 francs, while a quarter of households paid a monthly rent of less than 1,000 francs.

Switzerland had 2.3 million tenants in 2019, while 1.4 million people owned their homes.

An earlier study showed that residential property prices continue to climb in Switzerland despite the pandemic, having increased by 2.5 percent in 2020.

Both owned and rented housing is most expensive in the Lake Geneva region, which encompasses cantons of Geneva and Vaud.