Switzerland Real Estate Market: Buying vs Renting

In 2025, buying a home in Switzerland could be more cost-effective than renting. Explore the potential savings and benefits of homeownership in the Swiss real estate market.

A recent report from UBS has indicated that the cost of buying a home in Switzerland may soon become more affordable than renting in the long run. The bank's analysis suggests that as rental prices remain high and interest rates are expected to decrease, the average expense of a Swiss mortgage is projected to decrease, making property ownership a financially advantageous option.

As of March 2024, the average annual cost of owning a 4.5-room apartment in Switzerland, including the down payment, fees, and mortgage, was reported to be 32,500 francs, which is 7 percent higher than the annual cost of renting a similar property. However, UBS has observed a trend of decreasing homeownership costs compared to rental expenses, with owning a home being 16 percent more expensive than renting in the summer of 2023. Individuals who secured a long-term mortgage in mid-2023 are anticipated to have annual costs of 50,000 francs by 2033.

Currently, owning a home is already more cost-effective than renting in Canton Vaud, Fribourg, and Valais. With the Swiss National Bank expected to lower interest rates twice by early 2025 and the housing shortage in Switzerland persisting, UBS predicts that owning a home will soon be more economical than renting over the long term. By the end of 2024, homeownership is projected to be 4 percent pricier than renting, but this trend is expected to reverse in early 2025. In certain regions such as Bern, Solothurn, Aargau, Schaffhausen, and Thurgau, purchasing property is forecasted to be particularly advantageous by the following year.

Despite the potential cost savings of owning a home in Switzerland, the initial financial hurdles associated with buying a house, such as the down payment and fees, remain prohibitive for many individuals. Switzerland currently has the lowest rate of homeownership in Europe, with a report from Wüest Partner in November 2023 revealing that homes are on average 9 percent too expensive for families to afford. In Zug, house prices were found to be 49 percent beyond the means of two working individuals with a mortgage, and this figure rose to 63 percent for single-family homes. Only seven Swiss cantons were identified as offering apartments within the financial reach of an average local family, with this number dropping to just two for single-family homes.

While the cost of buying a home in Switzerland is projected to become more affordable than renting in the long term, the initial financial barriers to homeownership remain a challenge for many individuals in the country.