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Interpretation of the FPRE real estate meta-analysis for February 2026

PwC Immospektive
Immospektive
  • Industry
  • 10 minute read
  • 23/02/26
Sebastian Zollinger

Sebastian Zollinger

Director, Head Real Estate Advisory, PwC Switzerland

Email

The SNB continues to hold the policy rate at 0.0%. Despite very low inflation and a moderate economy, the threshold for a return to negative interest rates remains high, meaning that the financing environment remains stable. The rental property market stabilised slightly at the end of the year due to a decline in population growth, but remains structurally tense. Rents for new tenancies fell in the short term, but remain significantly higher year on year. There’s still a pronounced shortage of supply, particularly in urban centres. For Zurich, 14 June 2026 is likely to be a fateful day, as this is the date of the vote on the Housing Protection Initiative, the adoption of which could put additional pressure on the supply side and dampen willingness to invest in the rental property segment in the long term. Moderate stabilisation continues in the office market. The return performance reflects this differentiation: residential investment properties continue to generate high total earnings, while office properties are only recovering selectively and vary widely by region. The price momentum for residential property is slowing, but the market is supported by owner-occupied housing. The financing environment remains supportive and the abolition of imputed rental value is creating additional impetus for demand, particularly in the new-build segment. Despite moderate price development, market liquidity reached a record level, which is reflected in an exceptionally high number of transactions, while market participants’ price expectations remain largely positive.

The information on market developments, on which Immospektive is based, can be found in FPRE’s real estate meta-analysis. References to FPRE graphics in our text are marked [1] etc. 

Focus on monetary policy: SNB maintains zero interest rates; low interest rate environment supports market activity

During its monetary policy assessment on 11 December 2025, the Swiss National Bank (SNB) left the SNB policy rate unchanged at 0.0%. Following the two interest rate cuts of 25 basis points each in the first half of 2025, the SNB is thus confirming its course of a stabilising monetary policy at a nominally neutral level. Inflation weakened further at the end of the year. After 0.2% in August, annual inflation fell to 0.0% in November 2025, due in particular to lower price increases in the hotel industry, as well as rents and clothing. Despite lower inflation in the short term, medium-term inflationary pressure remains virtually unchanged from the last assessment. The conditional inflation forecast averages 0.2% for 2025, 0.3% for 2026 and 0.6% for 2027 and is therefore within the price stability range over the entire forecast horizon.1 The international environment was slightly more robust at the end of the year than was expected in autumn, but remains characterised by considerable uncertainty. Although the global economy proved to be more resilient in the third quarter, trade policy risks and geopolitical tensions continue to weigh on global momentum. The reduction in US tariffs to 15%, which was agreed in mid-November, noticeably reduced the downside risks for the Swiss export industry, particularly for cyclical industries like the machinery and watchmaking sectors. Negative interest rates are not considered the base scenario for the time being, as the KOF Institute assumes that the SNB will leave the key interest rate at 0.0% over the forecast horizon despite very low inflation. A scenario with negative interest rates would only become an option if inflation were to fall below the price stability range on a permanent basis and a sustained deflationary environment were to emerge.2

The international environment remains characterised by below-average growth momentum, as the economy in the euro area is only recovering slowly and economic momentum in the USA is being dampened by high inflation, trade policy uncertainties and fiscal tensions. At the same time, the continued weakness of Chinese domestic demand and structural adjustments in global trade mean that global growth momentum is only likely to develop gradually in 2026.3 For Switzerland, the SNB is forecasting GDP growth of just under 1.5% for 2025 as a whole and around 1% for 2026, meaning that the economy will grow below its long-term potential. The domestic economy thus remains the most important stabilising factor, supported by rising real wages, a stable propensity to consume and the relaxed monetary policy. At the same time, the labour market is likely to continue to deteriorate slightly in this environment, with a moderate rise in the unemployment rate.4 Although the SNB has not ruled out the introduction of negative interest rates again in principle, the threshold for this is significantly higher than in previous phases of expansionary monetary policy. The SNB now attaches greater importance to the potential side effects of negative interest rates, for example on the earnings situation of banks and pension funds as well as the risk appetite on the financial and real estate markets. The continuing interest rate differential with the euro area is also having a relieving effect, limiting upward pressure on the Swiss franc and stabilising the SNB’s room for manoeuvre in terms of monetary policy.5

Overall, there is much to suggest a prolonged phase of stable zero interest rates, as inflation is within the range of price stability and the interest rate cuts already implemented are having a stabilising effect on the economy. For the real estate market, this results in high market activity with a high transaction volume, although without additional impetus from further monetary easing.

1 SNB, Geldpolitische Lagebeurteilung vom 11. Dezember
2 KOF, Konjunkturbericht, Winter 2025
3 KOF, Konjunkturbericht, Winter 2025
4 SNB, Geldpolitische Lagebeurteilung vom 11. Dezember
5 Raiffeisen, Newsletter Zinsprognose Februar 2026

Rental housing market: short-term decline in rents for new tenancies as immigration slows down

The rental housing market in Switzerland showed signs of slight stabilisation at a high level at the end of 2025. Rents for new tenancies fell by −1.0% in the fourth quarter of 2025 compared to the previous quarter, but were still +3.0% higher year on year [23]. Despite the short-term correction, rental momentum thus remains well above the long-term average and reflects the continuing pronounced excess demand, particularly in urban centres. In the Zurich region, market rents again recorded an above-average increase of +5.4% year on year, clearly reflecting the structural shortage in the economically strong centres and their agglomerations [23].

The rental housing market continues to be characterised by a pronounced shortage of supply. The continuously falling vacancy rate, most recently around 1.0% in June 2025, reflects the ongoing excess demand, which is manifested in significantly rising quoted rents and market rents. There are large regional differences in this respect. While peripheral regions are hardly experiencing any rental pressure, growth in the metropolitan centres, particularly in the Zurich region, remains above average. At the same time, however, the first signs of saturation are emerging in the high-end segment, without any noticeable easing of the structural tension in the overall market.6 In parallel, the supply of new rental apartments is still severely limited, as construction activity remains at a low level and no substantial increase in supply is expected in the short term [14]. Overall, the rental housing market therefore remains structurally tense, even if the short-term pace of growth has recently slowed somewhat due to lower immigration as a result of the cooling of the labour market.7

In the fourth quarter of 2025, there was a noticeable slowdown in the growth momentum of new tenancies on the Swiss rental housing market. Following the significant increases in the previous quarters, rents for new tenancies fell slightly in many cantons in both the existing properties and new-build segments. In a quarter-on-quarter comparison (Q3 2025 – Q4 2025), rents for new tenancies for existing properties fell by −1.3% on average, while new-build rents also declined by −0.7%. This indicates a temporary easing in market activity towards the end of the year. In a year-on-year comparison (Q4 2024 – Q4 2025), however, the trend remains clearly positive. Rents for new tenancies rose by +3.8% for existing apartments and +2.3% for new apartments. This underlines the fact that the short-term slowdown over the course of the quarter does not fundamentally call into question the continued high underlying momentum of the Swiss rental apartment market.8

However, a differentiated look at the cantonal development of rents for new tenancies still reveals considerable regional differences. Despite the overall downward trend, growth was once again recorded in individual markets with strong demand. Particularly noteworthy are the canton of Zug (existing properties: +1.7%, new builds: +0.6%) and Schaffhausen (existing properties: +2.3%, new builds: +0.9%), where the supply shortage remained noticeable in the fourth quarter. Also in Nidwalden (existing properties: +0.7%) and Uri (existing properties: +0.4%), there were slight increases in the existing properties segment. In contrast, the major urban centres recorded slight declines for the most part. In the canton of Zurich, rents for new tenancies in both existing properties and new builds fell by −0.3%, while in the cantons of Bern (existing properties: −0.6%, new builds: −0.8%) and Basel-Stadt (existing properties: −1.0%, new builds: −1.2%), a similar trend was observed. This indicates a certain degree of normalisation following the sharp price rises of recent quarters. In the peripheral cantons, the correction was more pronounced in some cases. Especially in the Jura (existing properties: −1.6%, new builds: −1.8%), Grisons (existing properties: −1.8%, new builds: −1.9%) and Appenzell Innerrhoden (existing properties: −1.8%, new builds: −1.9%), rents for new tenancies fell noticeably.9

In a year-on-year comparison (Q4 2024 – Q4 2025), however, the picture remains clearly positive. Rents for new tenancies for existing properties continued to rise significantly in most cantons, with particularly strong increases in Zug (+12.3%), Schaffhausen (+11.0%) and Schwyz (+5.9%). The upward trend in new-builds also continued, albeit at a slower pace, with above-average annual growth rates in Zug (+8.2%), Zurich (+4.0%) and Geneva (+3.4%). Overall, the year-on-year comparison confirms that the structural excess demand on the Swiss rental housing market remains intact despite the short-term quarterly corrections.10

For the city of Zurich, 14 June 2026 is likely to be a fateful day, as this is the date on which the Housing Protection Initiative will be voted on, the adoption of which is likely to have a significant impact on the supply side of the rental housing market and put a lasting dampener on investment in the canton of Zurich.11 If the initiative is adopted, the Zurich real estate market could follow the example of Basel-Stadt and Geneva, where comparable regulations have led to a significant decline in new-build and renovation investments, a shortage of supply and long-term increases in rents for new tenancies, as regulatory intervention increasingly distorts market mechanisms.12

Construction activity in Switzerland showed initial signs of stabilisation over the course of 2025, but remained subdued overall. The Swiss Construction Index (SBV) stood at 100 points in the third quarter of 2025, an increase of 3.0% compared to the same quarter of the previous year, indicating a slight upturn in construction activity. The increase was particularly pronounced in residential construction, which grew by 7.7% year on year. Despite this recovery compared to the previous quarter, construction activity remains at a below-average level and is not sufficient to noticeably alleviate the structural supply shortage in the housing market. [14, 15]

Rental housing market – development Q4 2025

Source: FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 4. Quartal 2025

6 FPREview, Immobilienmärkte Schweiz 2026, Q1
7 NZZ, Die Wohnungsmieten steigen kaum noch – das liegt auch daran, dass weniger Expats in die Schweiz kommen, 05.02.2026
8 FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 4. Quartal 2025
9 FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 4. Quartal 2025
10 FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 4. Quartal 2025
11 Kanton Zürich, Regierungsratsbeschluss Nr. 105/2026, 06.02.2026
12 Baublatt, Studie: Die Auswirkungen der Wohnschutzinitiative im Kanton Basel-Stadt, Januar 2025

Office space market: moderate recovery in a difficult economic environment

The stabilisation observed in the Swiss office market over the course of the year continued in the fourth quarter of 2025. At a national level, market rents for office space rose by +2.1% compared to the previous quarter, confirming the positive momentum following the weaker previous periods. In a year-on-year comparison, however, growth was moderate at +0.4%, which indicates that overall momentum remains subdued. [35] At the end of the year, the Swiss office market was thus stable overall, supported by a robust domestic economy and continued high demand for centrally located, high-quality office space.

However, the labour market environment remains challenging. The economic slowdown in cyclical sectors and the subdued employment prospects are having a dampening effect on the short-term demand for additional office space. According to the current KOF forecast, only moderate employment growth of around 0.5% is expected for 2026, with the unemployment rate rising to around 3.1%. Against this backdrop, a sideways trend in demand for office space can be expected in the short term, with demand for high-quality locations remaining above average.13

In the fourth quarter of 2025, the Swiss office space market remained heterogeneous, with pronounced regional differences. While a significant recovery in rents for new tenancies was observed in several cantons, other markets remained clearly under pressure. In a quarter-on-quarter comparison, the cantons of Zug (+4.9%), Neuchâtel (+4.9%), Vaud (+4.0%), Solothurn (+4.4%) and Geneva (+4.3%) in particular recorded strong increases, indicating robust demand in well-connected and economically strong regions. The cantons of Thurgau (+3.0%), Aargau (+2.9%), Bern (+2.8%) and Zurich (+1.6%) also recorded positive developments. In contrast, the corrections of the previous quarters continued in some cantons. The cantons of Schaffhausen (−3.5%) and Grisons (−3.4%) saw particularly significant quarter-on-quarter declines, while Lucerne (−1.4%) also recorded negative development. These declines reflect persistently weaker demand in smaller and more cyclical office markets.14

A look at the annual development (Q4 2024 – Q4 2025) underlines the continued segmentation of the office space market. In the cantons of Neuchâtel (+12.9%), Thurgau (+11.0%), Geneva (+4.4%), Vaud (+3.1%) and Solothurn (+3.0%) in particular, rents for new tenancies rose significantly year on year. By contrast, the sharpest annual declines were recorded in the cantons of Grisons (−11.2%), Schaffhausen (−10.3%), Fribourg (−6.3%), Lucerne (−5.1%) and Ticino (−4.6%). In Zurich (+2.6%) and Basel-Landschaft (+1.8%), however, the year-on-year trend remained moderately positive, while Bern (−0.1%) and Zug (−0.3%) recorded largely stagnant levels.15

In structural terms, the increasing preference for high-quality, ESG-compliant office space in central locations was confirmed in the fourth quarter of 2025. In these segments, rents are comparatively stable to rising, while functionally obsolete or peripherally located office space remains under pressure to adapt. The supply situation on the Swiss office space market was stable overall in the fourth quarter of 2025, although there are still significant regional differences. According to JLL, the availability rates in the major centres were 3.6% in Zurich, 4.3% in Geneva and 5.9% in Basel, which means that Basel in particular continues to have an increased supply level. A slight decline in availability rates was observed in a quarter-on-quarter comparison. This indicates good absorption of available office space, particularly in central and sought-after submarkets. [40]

Office space market – development Q4 2025

Source: FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 4. Quartal 2025

13 KOF, Konjunkturbericht, Winter 2025
14 FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 4. Quartal 2025
15 FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 4. Quartal 2025

Return performance: robust residential returns, office properties with increased peripheral risk

In the fourth quarter of 2025, the (rolled) total annual return for multi-family units remained at a high level with around 12.2%, although slightly lower than in the previous quarters. The attractiveness of residential investment thus remains pronounced and continues to be supported by the structurally strong demand for rental apartments and the limited supply. The return is primarily composed of a clearly positive return on investment (+8.9%), while the cash flow return remained stable at around 3.3%. This confirms that the performance of multi-family units continues to be more value-driven, while current income remains at a solid, yet moderate level [51].

For office properties, on the other hand, returns continue to be more subdued and more volatile. The (rolled) total annual return in the fourth quarter of 2025 was around 6.0% and therefore higher than in the same quarter of the previous year, but still significantly lower than the returns on residential investments. The cash flow return remained comparatively stable at around 3.5% and represents the key driver of returns in the office segment, while the return on investment was positive at around 2.6%, but remains at a moderate level. Below-average or negative performance continued to be observed in peripheral and structurally weaker office markets in particular, reflecting the persistently challenging market situation in the office segment and the pronounced segmentation by location and quality of the property [52].

A look at the cantonal development of the (rolled) total annual returns for multi-family units also shows an overall high and broadly supported return level in the year 2025. Double-digit total returns were achieved in almost all cantons, with the majority of regions significantly increasing their values compared to 2024. The canton of Schaffhausen leads the field with a total return of 14.9% (2024: 14.2%), followed by Uri (14.7%), Solothurn (14,2%) and the two cantons of Appenzell (13.9% each). Above-average returns were also achieved in Fribourg (13.3%), Valais (13.3%), Aargau (13.2%) and Vaud (13.0%), among others. The lowest overall return was once again observed in Grisons at 8.5%, meaning that regional differences remain, although the overall level remains high.16 The average minimum discount rate (net, real) for multi-family units was 1.82% as at mid-February 2026 according to estimates by the leading valuation houses in Switzerland, down 2 basis points on the previous quarter. This renewed, albeit slight, reduction reflects the continued high level of investor interest in residential investment properties and the pronounced demand for stable cash flows in a macroeconomic environment characterised by uncertainty. [32]

In contrast, the development of the (rolled) total annual returns for office properties is much more heterogeneous and volatile. While individual cantons reported very high returns in 2025, such as Valais (24.0%), Thurgau (19.9%), St. Gallen (16.0%), Neuchâtel (15.5%) and Geneva (14.3%), other regions continued to record negative or weak overall returns. The (rolled) total annual returns were negative in the cantons of Ticino (−8.6%), Schwyz (−6.3%), Fribourg (−4.7%), Zug (−2.4%) and Basel-Stadt (−2.1%).17

This trend points to ongoing value corrections in peripheral and structurally weaker office markets, while central and economically robust locations are increasingly benefiting from selective demand. Cash flow returns remained stable across many cantons, but were not able to fully offset the sometimes significant changes in value, which emphasises the continuing heightened uncertainty in the office segment.

Return development Q4 2025

Source: FPRE, Marktindizes für Renditeimmobilien, 4. Quartal 2025

16 FPRE, Marktindizes für Renditeimmobilien, 4. Quartal 2025
17 FPRE, Marktindizes für Renditeimmobilien, 4. Quartal 2025

Residential property: slowing price momentum with exceptionally high liquidity

Prices on the market for residential property again continued to rise in the fourth quarter of 2025, although with a further slowdown in momentum. In a quarter-on-quarter comparison, prices rose moderately overall, while year-on-year growth remained solid. The development in owner-occupied housing remained particularly pronounced. These prices recorded an increase of +0.5% quarter on quarter and were +6.3% higher year on year [62]. Single-family units, however, developed more cautiously. While prices fell slightly by −0.1% compared to the previous quarter, there was still a moderate price increase of +1.1% year on year [56]. This development underlines the increasing differentiation within the residential property market, with owner-occupied housing in particular continuing to benefit from the structurally high demand. At −0.04% at the beginning of February, SARON remains below the 0.0% mark, unchanged from the previous quarter.18  

A look at demand indicates that the decision to abolish imputed rental value in 2025 marks a far-reaching intervention in the taxation of residential property and changes the economic trade-off between buying and renting. The abolition of imputed rental value significantly reduces the running costs for owners, making home ownership more financially attractive than renting in many Swiss municipalities, particularly in high-priced rental markets; this development should additionally support the demand for home ownership, especially in the new-build segment.19

The cantonal differences remained pronounced in the fourth quarter of 2025. In the case of owner-occupied housing, there were particularly sharp price increases in Schwyz (+3.8%), Lucerne (+3.3%) and Obwalden (+2.5%), followed by Jura (+1.9%), Nidwalden (+1.7%) and Zurich (+1.6%), Uri and Grisons (+1.5% each). By contrast, slight declines were observed in Geneva (−1.8%), Appenzell Ausserrhoden (−1.3%), Ticino (−0.7%) and St. Gallen (−0.4%). In a year-on-year comparison (Q4 2024 – Q4 2025), Schwyz (+12.8%), Lucerne (+11.2%) and Basel-Stadt (+11.1%) in particular recorded the highest growth rates, while Geneva (−1.8%) was the only canton to report a decline.20

The picture for single-family units was again much more subdued in a quarter-on-quarter comparison. Prices fell in several cantons, particularly markedly in Nidwalden (−1.7%), Ticino (−1.6%), Appenzell Ausserrhoden (−2.2%) and Appenzell Innerrhoden (−2.0%). Positive quarterly developments remained the exception and were mainly limited to Zug (+2.7%), Basel-Stadt (+1.1%) and Vaud and Uri (+0.9% each). Year on year, the overall price trend remained moderate with positive growth rates in most cantons, while Ticino (−4.5%), Obwalden (−3.5%) and Nidwalden (−2.3%) continued to show declining trends.21

The volume of mortgages in Switzerland continued to rise in November 2025 and most recently reached around CHF 1,241.2 billion, once again recording an all-time high. This corresponds to a year-on-year increase of around +3.2% [22]. On the interest rate side, SARON remained below the 0.0% mark at the end of 2025 and was recently slightly in negative territory. Current forecasts assume that SARON is likely to remain at around 0.0% until the end of 2027, meaning that financing conditions will remain favourable despite a moderate economic recovery. A moderate increase to only around 0.3% to 0.5% is still expected for returns on ten-year government bonds in the same period [18].

The price expectation index remained at an elevated level in the fourth quarter of 2025 for both single-family units and owner-occupied housing, and continues to signal positive market expectations in the majority of cases. [59, 65] Based on the latest analysis by the Swiss Real Estate Datapool (SRED), a marked upturn in the residential property market is expected by the end of 2025. With 4,128 financed transactions in the fourth quarter of 2025, well above the level of the previous quarter and the previous year, a new high was reached compared to previous years, indicating exceptionally high market liquidity and robust demand. Despite this high level of activity, transaction prices for owner-occupied housing remained stable on average in Switzerland, with the average transaction price remaining unchanged at CHF 920,000. By contrast, transaction prices for single-family units rose slightly, with the average increasing from CHF 1,260,000 to CHF 1,280,000 per property compared to the previous quarter, indicating continued solid demand in the single-family unit segment.22

Price development – owner-occupied housing Q4 2025

Source: FPRE, Transaktionspreis- und Baulandindizes für Wohneigentum Schweiz, 4. Quartal 2025

18 SNB, Current interest rates and exchange rates, Februar 2025
19 Tagesanzeiger, In diesen Gemeinden ist Eigentum Kaufen günstiger als Mieten
20 FPRE, Transaktionspreis- und Baulandindizes für Wohneigentum Schweiz, 4. Quartal 2025
21 FPRE, Transaktionspreis- und Baulandindizes für Wohneigentum Schweiz, 4. Quartal 2025
22 Swiss Real Estate Datapool (SRED), SRED Newsletter, 4. Quartal 2025

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