Buying your own home in Zurich costs almost 25% more in real terms than it did five years ago, the highest increase of any European city according to the UBS bank. Over the last four quarters, the Swiss business capital also recorded one of the highest rent increases (+25%) of all the cities evaluated in the study.

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“Due to the limited availability of property, home ownership in Zurich is increasingly seen as a luxury good,” note UBS analysts. They estimate that only 15% of the population is in a position to buy a property.

In Geneva, house prices have risen by 10% over the past five years, “but have stabilised over the last four quarters”, said the experts. On the shores of Lake Geneva, “rents have risen more strongly than incomes over the last four quarters”, they noted.

Zurich real estate bubble

“Over the next few years, price growth will be lower in Zurich than in Geneva,” stressed UBS economist Thomas Veraguth at a press conference.

“It’s difficult to see opportunities for an improvement in access to home ownership”, and we’re currently heading for a deterioration in the situation, stressed the specialist. For a change to take place, “Switzerland would have to completely overhaul its land use policy”, added Veraguth.

Against the backdrop of a housing shortage, the Swiss National Bank’s (SNB) next expected cut in the key interest rate (SNB meets on Thursday) will certainly boost the construction sector, but with a one- to two-year lag, added the expert. For the time being, the lack of supply is keeping prices up.

By international comparison, Zurich ranks third in terms of real estate bubble risk, behind Tokyo (30% price increase over five years) and Miami (+50%). Geneva ranks sixth in the global real estate bubble index compiled by UBS, behind Toronto (down slightly) and Los Angeles (stable).

Translated from French by DeepL/ac