For the last 20 years (note ed. of 2003 to 2023) house prices in Switzerland have increased by 117%. The total value of Swiss mortgages also doubled to 110% over the period under review.
This is particularly noticeable against the background of an 11% increase in consumer prices and a 65% increase in gross domestic product between 2003 and 2023. Thus, the housing market in Switzerland has outpaced all other sectors of the economy, including wage growth.
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In August 2024, the SNB reported that 1.216 billion francs had been frozen in the form of mortgage loans, more than double the figure since November 2005. The big mortgage has caused Swiss banks to abandon traditional investments in savings and loans to new entrepreneurs and technologies and to focus on real estate lending. Today, 85% of all loans issued in Switzerland are mortgages.
The similarities between the current over-indebted housing market and the situation in 2008, when inflated housing prices and credit triggered the global economic crisis, have not gone unnoticed.
A report by the Swiss bank UBS showed that Zurich is the third city with the highest risk of a property bubble. Townhouses are increasingly perceived as a “luxury item” and “status symbol”. UBS warned that despite the high prices, they will continue to rise in the future.
Despite the high prices, the new head of the SNB, Martin Schlegel, believes that “the risk of a correction has certainly become smaller in the short term”. Even higher taxes, costs and fees failed to curb the housing market.
„Real estate prices can no longer be explained,” Schlegel added. He believes that lower interest rates will lead to “vulnerabilities” in the long term and warns banks and lenders to remain vigilant and cautious when investing.
Zurich is second in terms of quality of life after Vienna. It occupies this prestigious position thanks to the concept of “15-minute bastard“, i.e. 99% of the city's residents can reach essential services within 15 minutes of walking time.
Switzerland retains the first place for the year ahead in the OOH index for human development, thanks to high incomes and long life expectancy. The gross national income of a person is 69,433 USD, and the gross wealth of a Swiss citizen reaches 709,612 USD.
Despite these impressive numbers, the life lessons are significant. Zurich, Geneva and Benin are among the most expensive cities in the world, and renters and healthy lifestyles are rapidly reducing the overall cost of living.
You can see detailed statistics on average property prices in Bulgaria by cities and neighborhoods HERE