The Swiss population is known for being a nation of renters, with a low rate of home ownership compared to other European countries. While the homeownership rate in Switzerland had been steadily increasing between 1970 and 2015, recent years have seen a slight decline. Currently, only 15 percent of Swiss households can afford the “median home” today, compared to 60 percent two decades ago.
The study reveals that buying a home is most challenging in major cities and their surrounding areas, where double or triple the Swiss median income may be required. Despite these challenges, UBS predicts that home prices in Switzerland will continue to rise in 2023, with an average increase of almost 3.5 percent for condominiums and 2.5 percent for single-family homes. Looking ahead to 2024, economists expect slightly lower price increases, driven by factors such as foreign investment and economic recovery.
Financial institutions typically calculate mortgage interest rates at 5 percent to ensure affordability for potential buyers. However, despite these efforts, the gap between aspiration and reality is growing among the Swiss population. The estimated price for the median home is currently 880,000 francs, requiring a household income of 150,000 francs to afford it – significantly higher than the median household income of 115,000 francs.
Despite these challenges, the desire to own a home remains strong among the Swiss population. However, as prices continue to rise and income growth slows down, many households may find it increasingly difficult to make their dream of owning a home a reality.
In conclusion, while there are challenges associated with owning a home in Switzerland today – including high prices and limited affordability – economists expect that demand for housing will remain strong in coming years. As such
