Property Market Switzerland 2025 | 3

In June 2025, the Swiss National Bank (SNB) cut its key interest rate to 0%. It thereby continued its ongoing trajectory of monetary policy easing that began in March 2024, when the key rate stood at 1.75%. The resulting reduction in property financing costs is ratch­eting up the pressure on the prices of both owner-occupied housing and investment property.

This latest interest rate move was driven by a low rate of inflation in a year-on-year comparison (+0.1% in June 2025), an emerging economic slowdown — caused in particular by geopo­litical tensions and unpre­dictable US tariff measures — and a persis­tently strong Swiss franc.

Employment growth in Switzerland has lost momentum. In the first quarter of 2025, the number of full-time equiv­a­lents rose by just 0.7%, signif­i­cantly below the average for the last ten years (1.2%).

After years of above-average population growth, a slowdown is now apparent. The main reasons for this more modest devel­opment are a weakening of immigration due to a less buoyant labour market and the ongoing decline in Switzerland’s birth rate. That said, population growth continues to stimulate housing market demand, albeit not as strongly as we have seen over the last two years.

The forecasts in the table below are based on data up to the end of June 2025 and were therefore prepared before the recent announcement of US tariffs of 39% on Swiss exports. These high tariffs are expected to weigh signif­i­cantly on the Swiss economy and, according to KOF, could reduce GDP growth by 0.3 to 0.6 percentage points per year, depending on their duration. Should the pharma­ceu­tical industry also be subject to this tariff rate, a decline in GDP growth of at least 0.7 percentage points would be expected.