Despite the rise in real estate prices, 40% of Swiss people want to own their own home, writes today's “SonntagsZeitung”, based on a study by the University of Lucerne, published in November. However, this often remains a dream. Because becoming an owner is impossible for many, given the current high prices and financing constraints. The recent reduction in the key rate of the Swiss National Bank (SNB), from 1.0% to 0.5%, changes nothing.
In 2024, real estate prices have in fact increased further compared to 2023: by 3% for individual houses and by 3.4% for condominium housing (PPE). The trend will continue in 2025 due to low interest rates and increased demand. Some even predict an increase of around 4% for PPE and 4.5% for houses. “Confidence has returned,” explains Fredy Hasenmaile, chief economist at Raiffeisen Switzerland.
For tenants, the reduction in the key rate is rather good news. Because this reference rate – which determines rents –, currently at 1.75%, will be lowered in March 2055 by the Federal Housing Office. Tenants will therefore be able to request a reduction of around 2% – provided that their rent is based on the current rate, recalls the real estate consultancy Wüest Partner. Bank Raiffeisen even plans, if necessary, a second adaptation of this reference rate in December 2025
But be careful: for tenants who will move in 2025, we must expect continued rent increases, especially in the city, where the low number of new rental constructions maintains permanent pressure on demand. According to Fredy Hasenmaile, the increase will however be limited to a range of 3 to 4%.
Buying is more advantageous
The period during which renting was cheaper than buying will only last from mid-2022 to mid-2024. Thanks to falling interest rates, owning a home is once again more advantageous – 10 to 20% depending on the term of the mortgage – than renting a comparable apartment, if you add up ongoing costs such as interest. and maintenance. This trend will continue in 2025. However, not everyone will obtain the necessary financing. Because, recalls Adrian Wenger, mortgage expert at VZ VermögensZentrum, from January 1, 2025, new rules will apply regarding the granting of mortgage loans by banks. These will have to have more equity for the loans of more than 60% that they will grant. This will have an impact on the capital that they will require from their clients.
This change concerns building financing more than private residential real estate. Banks must, however, analyze their mortgage portfolios and make adaptations according to customers, notes the expert.
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