A new housing study from UBS has revealed that only around 15 percent of people in Switzerland have the funds available to buy a house. What’s more, with housing shortages set to continue, the bank estimated that fewer and fewer people will be able to afford a home in the future.
According to the data, only 15 percent of the population has the salary or income available to afford a mortgage to buy a single-family home in Switzerland, accounting for approximately 600.000 households. This is in dramatic contrast to 20 years ago when 60 percent of the population had the potential to purchase property.
UBS added that average house prices rose significantly in 2023. The biggest increases were recorded in eastern Switzerland and Canton Fribourg, where the average cost of a home rose by 4 percent. By contrast, house prices in Geneva and Basel fell slightly last year.
The findings follow a recent report by real estate agent and consultancy Iazi, which found that an income of 100.000 francs a year is now needed to secure a single-family home in all Swiss cantons. In the city of Zurich, a person or household would have to have a salary of at least 525.000 francs a year before they could even contemplate a mortgage - along with a down payment of over 600.000 francs.
Sadly, those hoping that prices will fall in the coming years will be disappointed, with UBS reporting that thanks to a growing economy, increasing demand for homes, cheaper interest rates on mortgages and the ongoing shortage of housing - estimated by the bank to be increasing by 10.000 homes a year - house and apartment prices are set to rise by 1 and 1,5 percent respectively in 2024.
While Switzerland is “unlikely” to see dramatic house price rises like those seen during the pandemic, the bank estimated that costs will increase more quickly in 2025 as the economy continues to improve.
When it came to rental properties, the UBS data reflected the experience of many people trying to find affordable homes in Swiss cities. In 2023, rental prices rose by 5 percent, with UBS predicting that costs will increase further if housing construction does not increase.