As house prices continue to plummet across Europe, it seems as though the Swiss housing bubble is once again bucking the continental trend. New data from the real estate consultancy company Iazi has revealed that the cost of buying a house has risen by 8,9 percent over the last two years, having more than doubled since 1998.

Swiss home prices rise 130 percent since 1998

According to the study, despite the significantly higher interest rates on Swiss mortgages seen up until recently, house prices have risen by 8,9 percent in the last 24 months. In the last six months alone, average home prices have risen by 2 percent. Those who bought a property in the last century will be happy to hear that since 1998, house prices have increased by 130 percent.

The Iazi findings mean that Switzerland is plotting a course into the financial headwind, with the United Kingdom (+3,1 percent) and Italy (+2,8 percent) being the only other European nations to have seen house prices rise in the last 24 months. This is in major contrast to France and Germany; thanks to lower demand caused by rising interest rates, home prices have fallen by 4,5 percent and 12,2 percent respectively in the last two years.

Though Swiss cities like Zurich and Geneva are often rated as at an extremely high risk of a housing bubble, Iazi said that "the frequently invoked bursting of a price bubble has not materialised". The agency added that they see no signs of prices falling anytime soon.

In terms of the most expensive places to buy a home in Switzerland, cities and ski resorts lead the way. Iazi found that for a 115-square metre apartment, Geneva is the most expensive at 2,22 million francs on average, followed by Zurich (2,12 million), St. Moritz (1,74 million), Zermatt (1,7 million) and Lausanne (1,65 million).

Why are Swiss house prices still so high?

So why does the Swiss housing market continue to boom despite predictions of a major price correction? According to Iazi, supercharged population growth in the last few years, driven mostly by immigration, has succeeded at keeping demand high. 

These newcomers, typically speaking, demand a high standard of living and a home near work, which for new arrivals usually means cities where housing shortages are at their worst. As a result, while higher interest rates price people out of the housing market in Germany, causing prices to drop, demand for housing in Switzerland is so extreme that homes retain and even increase their value, despite the higher cost to buy.

At the same time, the number of new homes being built in Switzerland has declined every year since 2019, though is expected to rise in 2025. With ever-high demand and ever-dwindling supply, the housing market is expected to remain overheated for many years to come.