Interest rates play a crucial role in the real estate market. In March, the Swiss National Bank (SNB) conducted its monetary policy assessment and decided to lower the key interest rate from 1.75% to 1.5%. The decision was justified by the decreased inflation, the real appreciation of the franc over the past year, and the below-trend economic growth in Switzerland, according to the Zurich Cantonal Bank.
Impact of the key interest rate on mortgage rates
The general interest rate for a ten-year fixed mortgage is currently around 1.9 percent, slightly higher than before the interest rate turnaround began in early 2022. Although interest rates are still historically very low, they are somewhat higher compared to previous years.
The low interest rates have led to increased demand for real estate from both private individuals and investors. This has contributed to the robust development of the Swiss real estate market despite global economic uncertainties. In cities such as Zurich, Geneva, and Basel, property prices have slightly risen in recent years, but demand far exceeds supply, especially for new constructions.
For many investors and private individuals, real estate has become an increasingly attractive investment option, as it promises higher and more stable returns compared to bonds and other traditional investments.
This has intensified the competition and further constrained the residential property market. Therefore, we recommend you to consider our current new construction offers to secure both modern comfort and long-term value appreciation potential.
The real estate market will continue to be influenced by interest rate developments, economic conditions, and regulatory policies. However, it is to be expected that Swiss properties will not lose their attractiveness.