Property Market Switzerland 2024 | 1

Despite the shaky international environment, the Swiss economy has proven remarkably agile: for 2023 as a whole, real GDP growth should come in at around 1.1%.

The labour market grew strongly in 2023, but the trend is pointing downwards: in the third quarter, employment increased by 1.7% compared to the same quarter of the previous year (the year-on-year figure for the second quarter was 2.2%).

Inflation rose again to 1.7% in December after an unexpectedly sharp decline to 1.4% in November 2023. The upturn was due mainly to increases in food and energy prices and rents. However, inflation has not exceeded the 2% mark since June 2023.

The yield on 10-year federal bonds fell from 1.3% in January 2023 to 0.8% in January 2024. This indicates that the markets expect inflation and key interest rates to fall. Nevertheless, it is quite possible that the markets are overestimating the likelihood and speed of a monetary easing. At present we do not expect multiple adjustments to interest rates this year, though we believe that a rate cut in the second half is possible.