Where in Switzerland property prices are rising the fastest

Across Europe inflation has shot up, leading to a rise in interest rates and more expensive mortgages. 

All of this has led to a significant drop in property prices in many countries. 

Yet Switzerland has remained somewhat of an outlier. Although the pace of growth has slowed significantly as a result of interest rate hikes, house prices have gone up - except for one region.

That's according to one analysis of residential property prices by the Swiss Real Estate Institute on behalf of the property portal Newhome, which was published on Monday.

Average prices continued to rise in almost all regions of German-speaking Switzerland and in Ticino in 2023. 

Prices for single-family homes climbed by an average of 3.6 percent compared to the previous year, which was significantly higher than the general Swiss inflation rate of 2.1 percent. In contrast, apartments didn't get too much more expensive (+0.4 percent).

The analysis is based on sales prices from the Swiss Real Estate Data Pool (SRED). This comprises homes financed by Credit Suisse, UBS and Zürcher Kantonalbank and covers around 40 percent of all transactions in Switzerland. In 2023, 6,631 owner-occupied homes changed hands in the six regions analysed.

READ ALSO: Are Swiss house prices set to fall in 2024?

Most expensive homes in central Switzerland

Of the six regions looked at, a single-family home in Central Switzerland, which includes the cantons of Uri, Schwyz, Obwalden, Nidwalden, Lucerne and Zug, is the most expensive. On average, homeowners shelled out CHF 1.64 million for a house in this area last year. This is 5.1 percent more than in the previous year of 2022.

The Zurich region ranked second with an average price of CHF 1.54 million (+1.3 percent compared to the previous year).

However, the biggest price hikes were actually in Eastern Switzerland (+8.2 percent), which includes the cantons Schaffhausen, Thurgau, St. Gallen, Appenzell Ausserrhoden, Appenzell Innerrhoden, and Glarus, as well as Ticino (+6.7 percent). These regions ranked ahead of Northwestern Switzerland (+3.5 percent), which encompasses Basel-City, Basel-Landschaft and Aargau.

Experts say the strong increases in Eastern Switzerland and Ticino can be explained by a catch-up effect and the fact that it is still easier to finance property there, as prices in both regions are slightly lower than elsewhere.

Espace Mittelland, which includes the cantons of Bern and Solothurn, was the only region to see falling prices (-2.1 percent). Single-family homes were also the cheapest there, with an average selling price of CHF 920,000.

READ MORE: Rents to cost of living: What will happen to the Swiss economy in 2024?

Condominiums in Zurich have become more expensive

The Zurich region overtook Central Switzerland at the top of the list for apartments. While average flat prices in Zurich rose by an average of 1.8 percent to CHF 1.14 million, they fell by 3.6 percent to CHF 1.08 million in Central Switzerland. In the previous year, both regions were on a par at the top.

All other regions became more expensive with the exception of Espace Mittelland, where average prices for flats fell by 8.8 percent. This means that a condo in the cantons of Bern and Solothurn now 'only' costs CHF 620,000 on average. Espace Mittelland has therefore replaced Ticino as the overall cheapest region (with average prices of CHF 680,000 for flats) in Switzerland, according to the research. 

One thing to keep in mind, though, is that there are huge differences between the municipalities. Among the five most expensive communities for detached houses, the municipality of Erlenbach ZH leads by a wide margin with an average property price of CHF 5.16 million. A detached house there costs an average of 1.31 million francs more than in the second most expensive municipality of Hünenberg (3.85 million).