Switzerland Real Estate Market: 25 Years to Afford Zurich Home

A new study reveals that it takes over 25 years of work to afford an apartment in Zurich, shedding light on the challenges of the Switzerland real estate market.

In a recent report by Iazi, the stark reality of Switzerland real estate market has been laid bare, revealing that prospective homebuyers in sought-after cities like Zurich may face a staggering wait of over twenty years to afford property. This analysis highlights the growing challenge for individuals earning average salaries in Switzerland, where housing affordability has become a pressing issue, particularly in urban centers.

The Affordability Crisis in Swiss Cities

The report from Iazi meticulously examined the average cost of a 70-square-meter apartment across more than ten locations in Switzerland. By juxtaposing these prices with the average gross salary of 88,000 francs per year, the findings paint a concerning picture of housing affordability. The average price for a 70-square-meter apartment in Switzerland stands at approximately 778,000 francs, necessitating nearly 8.8 gross annual salaries to secure such a property.

Interestingly, while Switzerland does not hold the title for the least affordable flats in Europe, it still faces significant challenges. A comparative study by Deloitte revealed that in Czechia, the cost of a similar apartment is equivalent to 13.3 gross annual salaries, while Slovakia, Hungary, Ireland, Israel, France, and Serbia also report higher affordability ratios than Switzerland.

Comparative Analysis of Housing Costs

Despite the high average salaries in Switzerland, the country still grapples with affordability issues. For instance, apartments in Denmark, Norway, and Italy require only 4.7, 4.8, and 5.3 annual salaries, respectively, making them comparatively more accessible. However, when focusing on individual cities, the situation becomes even more pronounced.

In Zurich, the cost of an apartment is alarmingly high, requiring 27 years of gross salary to purchase a 70-square-meter unit. Although the report does not factor in the higher wages in Zurich compared to the national average, it underscores the reality that locals must save for decades to afford a mortgage on a property priced at approximately 2.46 million francs. 

The Struggles of Homebuyers in Zurich

The challenges extend beyond mere affordability; they also encompass the financial prerequisites for homeownership. A separate report from Iazi in November 2023 indicated that individuals aspiring to buy a small house in Zurich would need an annual salary of at least 525,000 francs. This figure is coupled with a daunting down payment of over 600,000 francs, further complicating the path to homeownership for many.

Following Zurich in the rankings of least affordable cities are Geneva, Zug, and Basel, where the cost of apartments corresponds to 24, 20, and 15.9 years of gross salary, respectively. This positions these cities as the most unaffordable housing markets in Europe, with Amsterdam trailing behind at 15.1 years.

Exploring More Affordable Options

In stark contrast to the exorbitant prices in major cities, the report identifies Faido in the Canton of Ticino as the most affordable location for apartment seekers. Here, the average cost of an apartment is a mere 250,000 francs, equivalent to just three years' average Swiss salary. However, it is essential to consider that wages in Ticino are generally lower than in other regions of Switzerland, which may offset the apparent affordability.

The Broader Implications of Housing Affordability

The findings from Iazi's report underscore a critical issue facing many Swiss residents: the widening gap between salaries and housing costs. As urbanization continues to drive demand for housing in major cities, the pressure on the market intensifies, leading to inflated prices that are increasingly out of reach for average earners.

Moreover, the implications of this housing crisis extend beyond individual homebuyers. The inability to afford housing can lead to broader economic challenges, including reduced consumer spending and increased reliance on Switzerland rental markets, which may also be experiencing upward pressure on prices.

A Call for Solutions

As the data reveals, the dream of homeownership in Switzerland, particularly in its most desirable cities, is becoming increasingly elusive for many. With the average homebuyer facing a wait of over two decades to afford property in places like Zurich, it is clear that urgent solutions are needed to address the affordability crisis. Policymakers, urban planners, and stakeholders in the housing market must collaborate to develop strategies that enhance housing availability and affordability, ensuring that the Swiss dream of owning a home remains within reach for future generations.