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How fast are property prices rising in Zurich in 2024?

House prices in Zurich went up in the last quarter of 2023 at a faster pace than the rest of the country, new figures show. What's the outlook for 2024?

Published: 16 January 2024 17:24 CET
Apartments on a sunny day in Zurich. Photo by Vincent Dörig on Unsplash

Buying a home in Switzerland will certainly set you back. But there’s one canton where prices are rising at a quicker pace. 

In the canton of Zurich, residential property prices rose by a relatively high 1.6 percent in the last quarter of 2023, after prices had effectively come to a standstill in the third quarter with a fall of 0.1 percent, Zurich Cantonal Bank (ZKB) reported in its real estate barometer on Tuesday. 

This means that at the end of last year, homes in Zurich cost 3.7 percent more than in the previous year, according to the bank’s research. Across Switzerland, the increase was 2.0 percent.

READ ALSO: Property market – are Swiss prices set to fall in 2024?

What will the current year bring?

Anyone hoping for a drop in the cost of property is likely to be disappointed.

ZKB expects a slight slowdown in price growth for the current year – but no significant fall. For the canton of Zurich, ZKB is forecasting house prices to increase by 2.5 percent. For Switzerland, price growth is likely to be 1.5 percent.

The major trends on the property market from last year are likely to continue in 2024, ZKB said. Net immigration in Switzerland is set to remain high, while the decline in vacancy rates for rental flats will continue to cause problems. 

Residential construction activity – slowed by fewer building permits and higher construction costs – will not be able to meet the additional demand for flats, experts warn. 

It’s no wonder then that the city of Zurich was given the top spot in a recent worldwide ranking of cities most at risk of a housing bubble. 

READ ALSO: Zurich tops worldwide ranking of cities at risk of housing bubble

The UBS Global Real Estate Bubble Index 2023 found that only Zurich and Tokyo remained in the bubble risk category, down from nine cities the previous year. Zurich had the highest score of 1.71, while Tokyo scored 1.65.

It means that house prices are grossly overvalued in Zurich. But, according to this study, rental prices in the Swiss city are rising even faster than real estate. Rent increases of five percent are possible in the next years, UBS real estate experts reported.

READ ALSO: Renting in Zurich – why sticking to one apartment will save you money

According to real estate group RealAdvisor, the median price for apartments on the market in Zurich is CHF 1,720,000. The asking price for 80 percent of properties falls between CHF 860,000 and CHF 2,980,000. The average price per m² in Zurich is CHF 16,118/m² (price per square meter).

The median monthly rent for apartments on the market is CHF 2,230, according to RealAdvisor, while the monthly rent of 80 percent of properties is between CHF 1,000 and CHF 4,350. The average annual rent per m² in Zurich is CHF 487/m² / year (annual rent per square meter of living surface).

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PROPERTY

Where in Switzerland are most second homes located?

Whether mountain homes or other types of residences, some areas of Switzerland have more ‘holiday’ dwellings than others. Where is the highest number found?

Published: 3 May 2024 14:41 CEST
Where in Switzerland are most second homes located?

Many people associate the term ‘second home’ with chalets in the Swiss Alps.

And while many people do own properties there, which they use on weekends or during holidays, official data shows that many of these accommodations are located elsewhere as well.

This information comes from the Swiss Office for Spatial Development (ARE), which keeps track of the second-home situation throughout Switzerland.

But first: What are the rules on owning a second home?

Since Switzerland is a small country with a limited supply of land, the constructions priority is given to main residences, especially considering the acute housing shortage in many parts of the country.

For that reason, second homes can’t exceed 20 percent of any community’s overall housing stock.

Right now, “it is impossible to build second homes in 340 municipalities,” which had already reached this threshold, according to ARE. 

What are these areas?

At the end of 2023, these eight communities were added to the list of municipalities where construction of new second dwellings is no longer allowed:

  • Leissigen (BE)
  • Lauwil (BL)
  • Jussy (GE)
  • Pregny-Chambésy (GE)
  • Movelier (JU)
  • La Côte-aux-Fées (NE)
  • Démoret (VD)
  • Le Lieu (VD)

Where are most second homes located in Switzerland?

They are primarily concentrated in the southern part of the country, in traditionally tourist areas of Valais, Ticino, and Graubünden.

But a number of them are also located in other regions, like the Bernese Oberland and St. Gallen.

You can see each individual region on a map, here.

Note that in many of these areas, the proportion of holiday homes exceeds 50 percent.

That’s because the legislation limiting these properties to 20 percent went into effect in 2016, while many houses in tourist areas were built before that date. 

Does this mean you can no longer buy a second home in these communities?

No. You can purchase existing properties, but you can’t build new ones.

Also, if you happen to own a primary residence in these towns, you can’t all of a sudden decide to convert it into a holiday home.

This, in fact, has proven to be a problem in several cities, including Geneva, where primary residences have been transformed into holiday homes, which means they can no longer be rented out to permanent tenants.

This ‘transformation’ exacerbates the overall housing shortage.

Last but not least: does owning a second home in Switzerland allow you to live here full time?

Good try, but no.

Buying a home in Switzerland does not generally give any additional rights with regard to residency. 

If you are a EU citizen or national of EFTA (Norway, Iceland, or Liechtenstein) , then you will be able to live in Switzerland, as long as you have enough money to support yourself.

Non-EU / EFTA citizens will usually only be able to spend time in Switzerland under the 90/180 rule — which means a  maximum of 90 days in Switzerland out of 180 consecutive days.

READ ALSO: Can second-home owners extend their stay in Switzerland? 

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