No house generation: the impossibility of buying property in Switzerland 

Keystone / Michael Buholzer

In many countries, buying a home is slipping further out of reach for young people. Switzerland is no exception. We take a closer look at the country’s unforgiving property market and what it means for the next generation. 

“You just didn’t want it badly enough.” The young couple still think about the words of the seller – who inherited the property. They had placed a bid on a semi-detached house in a medium-sized Swiss city, a house around 100 years old that had not been renovated in half a century.  

Even though the bank had valued the property at no more than CHF1.49 million ($1.8 million), the couple offered CHF1.7 million.  

It wasn’t enough. Or as the seller put it: “nowhere near enough”. 

Many couples and families in Switzerland have had a similar experience. The shortage of land, low interest rates and a steady influx of workers from neighbouring European countries have continued to drive up demand for property. 

Prices for houses and apartments have skyrocketed in recent years. Between 2017 and 2024 alone, Swiss property prices saw an average increase of 30%. 

After the Covid pandemic, housing prices experienced an “incredible hike”, says Ursina Kubli, head of real estate research at Zürcher Kantonalbank (ZKB). Since then, prime locations have become significantly more expensive, and even remote areas have seen prices go up. “A rising tide lifts all boats,” she says.  

This year, the ZKB expects property prices in canton Zurich to climb by 4.5%, and by the same amount again in 2026. That adds up to a price jump of more than CHF140,000 for an average single-family home in Switzerland’s most populous canton within just two years. 

Savings of ordinary earners can no longer keep up, which means the dream of home ownership is slipping further out of reach for Switzerland’s middle-class. 

According to ZKB, only 9% of couples aged 30-40 could afford an average single-family home in canton Zurich in 2024 – compared with 13% less than five years earlier. 

Top earners are keeping up 

The rate of home ownership across all property types, age groups and Swiss regions stands at 36%. “This number has dropped in the past few years,” says Robert Weinert, chief analyst at the Wüest Partner consulting firm. 

Wüest Partner compared salaries and property prices across Switzerland, and the results are sobering. Around 58% of Swiss households with two earners are unable to afford an apartment, while buying a single-family home has become impossible for a staggering 79%. 

“The unequal distribution of income and wealth means that only a few people have a lot of money, but still enough to drive up prices,” says Weinert. This is particularly true for single-family homes as the market continues to shrink, at least in central locations where single-family houses are torn down and replaced by apartment developments.  

Claudio Saputelli, head of property analysis at Swiss bank UBS, agrees with Weinert. He adds that comparing median income with actual prices gives the wrong perspective on the market. “If you look only at those who can afford to buy a home, the trend seems less dramatic,” he says, explaining that top earners’ salaries have managed to keep up with the real estate market.  

A wedge in society 

Growing public frustration over rising property prices has become evident in comments on social media. On Reddit, for example, someone commented about buying a house in Switzerland. “Where do you want to buy? If you are looking in Zurich, forget it… Nothing is overpriced at the moment, it’s just that your money isn’t worth anything anymore.” 

A recent headline in the Tages-Anzeiger newspaper read, “Even those with a salary of CHF200,000 can no longer afford to buy a homeExternal link”. In English-speaking countries this situation is often referred to as a “housing affordability crisis” or simply as a “housing crisis”. The UK, the US and Australia, to name just a few, have experienced a similar development.  

“The crisis is driving a wedge through the fabric of society,” says economist Christian Hilber, who specialises in real estate and lectures at both the London School of Economics and the University of Zurich.  

Compared to the UK, the housing crisis has hit Switzerland quite late, according to Hilber. Adjusted for inflation, property prices in Britain have shot up by 405% since the 1970s (Q1 1970 to Q4 2024), while in Switzerland the increase has been more restrained and stood at “only” 106% over the same period.  

Hilber points the finger at strict spatial planning restrictions in Britain which have long slowed down construction. In contrast, Switzerland maintained pretty flexible spatial planning regulations until the early 2010s, with most of the steep price hikes occurring since then. 

This trend is also reflected in a recent graph by Wüest Partner that compares relative property price developments in member countries of the Organisation for Economic Co-operation and Development (OECD) over the past decade. 

Unequal distribution of wealth 

In the US, where the housing crisis has been smouldering for years, three-quarters of the population now describe housing affordability as a growing problemExternal link.  

Sarah Dickerson from the Kenan Institute of Private Enterprise, which belongs to the University of North Carolina’s business school, has observed a growing sense of resignation among the younger generation. “I think there’s still a sentiment that homeownership constitutes a vital piece of the American dream, but there’s also a recognition that that dream is no longer achievable for many Americans.” 

How mortgages work in Switzerland 

Switzerland’s low homeownership rate is rather surprising given the country’s favourable financing conditions. Mortgages do not need to be repaid as long as they cover less than two-thirds of the property value. In fact, there are even tax incentives for keeping the debt.  

When deciding on a mortgage, Swiss banks apply a theoretical interest rate of 5% to evaluate a buyer’s creditworthiness. On top of that, 1% of the real estate is added for maintenance and running costs. Altogether, these estimated costs must not exceed a third of the gross annual income of the household. Only then is the mortgage considered affordable.  

By international standards, Swiss interest rates are comparatively low, currently ranging from 1.4% to 1.6% for a ten-year fixed-rate mortgage. Following recent interest rate cuts, buying a property has become more affordable than renting, which has further fuelled the price surge. 

Dickerson sees the widening gap between the poor and the rich as a major problem. In the US, homeownership used to be a way for many people to build wealth, but that door is now closed to many. Only those with wealthy parents can still afford to buy – a trend which Dickerson thinks will deepen the social divide in the long run.  

Many Swiss have also acquired their wealth through property ownership. But due to the country’s strong pension and healthcare systems, homeownership carries less social weight than in other countries.  

This is evident in Switzerland’s homeownership rate, which has always been low by international standards. While a mere third of the Swiss population own the homes they live in, two-thirds of the populations in Britain and the US do. In countries with weak pension schemes, such as Romania, more than 95% of the population own their homes.

Purchasing strategies 

In Switzerland, young middle-class families often have little choice but to lower their expectations, such as expanding the search radius for properties. This shift is reflected in data from real estate platforms, says ZKB real estate expert Ursina Kubli. 

Another common route is to keep the property in the family, which is often the case. “Around half of all homes are passed on within families,” Kubli explains. 

A viable strategy which is common in Britian but rare in Switzerland is to buy whatever you can afford, even if it’s far from your dream home – just to get your foot on the property ladder. The idea is to sell again later and buy something that is more to your liking.  

Chances that things are changing in Switzerland are slim. With continued immigration from EU countries and a vacancy rate threatening to drop below 1%, the Swiss housing crisis is likely to get worse. 

Low interest rates and uncertainties on the financial markets have also made “buy-to-let” more attractive, especially when it comes to newly built apartments. The idea is to purchase property not to live in but to rent out for profit. As a consequence, when buying a property in an apartment block, young families often find themselves competing with financially well-off baby boomers looking for safe investment opportunities. 

Almost all experts interviewed by SWI swissinfo.ch agree that a drop in prices is not on the horizon.  

For Saputelli from UBS the only scenario for a drop in prices is a prolonged recession, which is hardly an appealing prospect for middle-class families.   

Edited by Balz Rigendinger. Adapted from German by Billi Bierling/ts