Is Now a Good Time to Invest in Swiss Real Estate?Alliance Relocation reacts to the SNB return to 0% interest rates

Is Now a Good Time to Invest in Swiss Real Estate? The Alliance Relocation team have been busy speaking with our trusted service providers to review the positives and negatives so you don’t have to.

From June 20th, 2025, the Swiss National Bank (SNB) cut interest rates back to 0%. It’s a headline that has raised many questions from our clients and we’ve been busy finding answers to the question Is Now the Right time to invest in Swiss Real Estate?

Here’s what you need to know, whether you’re considering a move, an investment, or just curious about what this all means for the Swiss property market.

0% Interest Rate. What’s the Story?

On June 19th, the SNB reduced its policy rate from 0.25% to 0%, a move driven by soft inflation and a strong Swiss franc. UBS describes the current environment as an “expansionary monetary policy,” which basically means borrowing is cheaper, and there’s more incentive to invest in tangible assets like real estate.

For buyers, this is great news. For renters? Potentially less so.

What’s Happening in Luzern, Zug and Zürich?

We dug into the data and consulted local experts: demand in the Swiss German region is strong. Here's what’s happening on the ground:

Home prices rose by 1.5% in Q1 2025 and 3.2% year-on-year, with rents climbing by 2 to 3%.UBS expects another 3 to 4% growth in house prices by the end of 2025.Vacancy rates in Luzern, Zug and Zürich are low,often under 1% and construction can't keep up.

With low financing costs and tight supply, buying property in these areas could be a smart move if you’re in a position to do so.

Bubble Risk or Opportunity?

UBS’s Real Estate Bubble Index currently sits at 0.29, indicating a moderate risk, but nothing alarming certainly compared to our European neighbours. Affordability is still an issue, as you will have seen, Swiss property isn’t cheap, but owning is often cheaper than renting over the long term, especially with interest rates at rock bottom.

What Type of Property Makes the Best Investment?

Here’s what we’re seeing in terms of trends and returns:

Single-family homes: Forecasted price increase of around 4%Apartments (Eigentumswohnungen): Expect a 3% lift, especially in commuter areasMulti-family buildings: Steady 2.5% rental growth and strong long-term yields

Our partners recommend:

Apartments in Zürich suburbs, Zug or lakeside Luzern, popular with tenantsMulti-family homes if you’re looking for income stability and capital growthSingle-family homes in high-demand, low-supply neighbourhoods for long-term upside

Can Foreigners Buy Property in Switzerland?

Yes, but it does depends on your status and as with everything in Switzerland it varies from Canton to Canton

If you live in Switzerland:

EU/EFTA nationals with B or C permits can buy primary residencesNon-EU nationals with a C permit can also buyB permit holders (non-EU) need special permission and are usually limited to one residence

If you’re a non-resident foreigner:

You can only buy holiday homes in designated tourist zones, and even then, permits and quotas applyCommercial property is open to everyone, regardless of nationality

In Luzern, Zug and Zürich, the market is tight for non-residents. You cannot purchase a regular apartment or house unless it qualifies as a holiday home, which is rare in these cities.

So, Should You Dive In?

If you're a Swiss resident (or planning to be), now is a favourable time to invest:

Interest rates are lowPrices are climbing steadilyLong-term rentals are in high demand, particularly in well-connected areas

If you're not a resident:

It’s trickier. You’ll need to meet stringent criteria, work through the legal steps, and accept that options are limited, especially in urban hubs like Zürich, also you will be behind any other residents applying for the same property.

Alliance Advice for Buyers

Check your affordability. Swiss banks still expect healthy down payments and strong creditworthiness. It is a good idea to schedule a meeting with your bank to discuss what your purchase range would be, before you even start looking. They will issue you with a certificate which many agents will request to see before even allowing a viewing.Think beyond just price appreciation, look at rental possibilities and long-term community developmentConsider multi-family units if you’re investing for rental incomeStay updated. SNB may cut further, but inflation and FX pressures could shift the landscape againWork with experts

In Summary

The Swiss real estate market is in a strong position, and the return to 0% interest rates has created a window of opportunity for buyers, especially in Luzern, Zug and Zürich. Whether you're relocating, investing or simply exploring your options, now is the time to get informed and act wisely. With the UK and some European countries suffering a sharp downturn in house prices, Switzerland has never looked better.

At Alliance, we’ve already spoken with trusted lenders, legal advisors and property partners to help guide our clients through this unique market moment. If you’re ready to explore your options, we’re here to support you every step of the way.