Property Market Switzerland 2026 | 4

The Swiss economy has gained consid­erable momentum. According to the State Secretariat for Economic Affairs (SECO), gross domestic product (GDP), adjusted for sporting events, grew by 1.5% in the second quarter of 2026 compared with the previous quarter – the strongest growth since 2021. The chemical and pharma­ceu­tical industry was the main driver of growth, while the services sector and construction invest­ments also expanded. For 2026 as a whole, we therefore expect economic growth of 1.8%, followed by 1.5% in 2027. Risks include the conflict in Iran, high energy prices and trade policy uncer­tainty, which persists even after the US midterm elections.

The labor market has also gained momentum faster than expected. According to the Federal Statistical Office (FSO), employment in the second quarter of 2026 was 2.0% higher than a year earlier. Most of the increase came from the services sector, partic­u­larly healthcare, while tradi­tional office-based indus­tries recorded below-average growth. For 2027, we expect employment growth of 1.4% and population growth of 0.8%.

Inflation has returned. In October 2026, it rose to 1.5%, its highest level since the end of 2023. The main driver was the sharp increase in prices for petroleum products. However, there are no signs of broad-based price pressure, and core inflation remained low. Inflation therefore remains within the Swiss National Bank’s (SNB) target range and well below the rate in the euro area. For 2027, we expect inflation of 0.7%, while construction prices are likely to rise more strongly, by 3.0%.

The SNB left its key interest rate unchanged at 0.0% in September 2026. However, the recent weakening of the Swiss franc has given it greater room for maneuver, making an initial rate hike in 2027 possible. Long-term interest rates are already edging higher. In September 2026, ten-year fixed-rate mortgages carried an average interest rate of 2.2%. Financing condi­tions therefore remain favorable, but are no longer providing additional momentum for the real estate market.