Property Market Switzerland 2025 | 4

After the SNB responded to the surge in inflation with several interest rate hikes in 2022 and 2023, it began easing monetary policy again in 2024. By June 2025, the key interest rate had been lowered to 0%. Our baseline scenario assumes no change of direction in 2026. A step below zero remains possible, though currently with a lower proba­bility. A rise in the key interest rate seems unlikely given our forecast inflation of 0.5% for 2026, but it cannot be completely ruled out in the event of external shocks.

In the second quarter of 2025, the number of employed persons (in full-time equiv­a­lents) increased by only +0.5% compared to the same quarter of the previous year – the weakest growth since the COVID-19 pandemic and clearly below the ten-year average of 1.2%.

The outlook for the labour market remains subdued for 2026 as well. US tariffs, weak economic condi­tions in key export markets such as Germany, and a strong Swiss franc are weighing on export-oriented indus­tries. In addition, efficiency gains through Artificial Intel­li­gence (AI) are dampening employment growth.

In the first half of 2025, the permanent resident population grew by only 31,800 people, which is 21% less than in the same period of the previous year (40,500). For the full year, an increase of 0.8% is expected, compared with +1.0% in 2024. In 2026, growth is likely to be well below average at +0.6%. In addition to lower net immigration, a smaller natural population increase contributes to this: birth rates are declining while the number of deaths stagnates.