Immospektive November 2025

Sebastian Zollinger

Director, Head Real Estate Advisory, PwC Switzerland

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The SNB leaves its key interest rate unchanged at 0.0% on September 25, 2025. Despite low inflation and a gloomy global economy, the hurdle for negative interest rates remains high for the time being. The rental housing market remains tight. Rents for new leases continue to rise moderately, driven by scarce supply, especially in urban centers. The Zurich housing protection initiative is considered a significant risk factor for the supply side and, if accepted, is likely to shake up the Zurich real estate market. After several weak quarters, the office market is showing signs of slight stabilization: central, ESG-compliant space remains in demand, while peripheral locations continue to be under pressure and segmentation is increasing. Yields reflect this picture: multi-family homes continue to deliver high total returns, while office properties are recovering in some areas but remain heterogeneous across regions. Prices for residential property continue to rise, driven by condominiums. On the financing side, the environment remains challenging. At the same time, the abolition of the imputed rental value is creating new market dynamics through changed financing strategies and investment incentives. Despite stricter lending policies, market participants' price expectations for residential property remain predominantly positive.

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

Focus on monetary policy: SNB sticks to zero interest rate policy, hurdles for negative interest rates still too high

In its monetary policy assessment on September 25, 2025, the Swiss National Bank (SNB) left its key interest rate unchanged at 0.0%. Following two interest rate cuts in the first half of 2025, this marks a stabilization at a nominally neutral level. The SNB is thus responding to subdued global economic development and only slightly rising inflation. Inflation stood at 0.2% in August 2025, following –0.1% in May, which is attributable in particular to higher prices in tourism and for imported goods.¹ The conditional inflation forecast remains unchanged from the previous quarter: average inflation is expected to be 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027. Geopolitical uncertainties related to US trade policy continue to weigh heavily on global economic momentum.² The punitive tariffs of up to 39% imposed by the US on Swiss exports have noticeably clouded the outlook, particularly in the machinery and watch industries.³ The news on November 14 that US tariffs would be reduced to 15% is likely to raise new hopes for a rapid recovery in Swiss exports. However, the hurdle for the SNB to reintroduce negative interest rates is likely to be significantly higher than in previous phases of expansionary monetary policy due to the associated consequences for banks, pension funds, and the real estate market.⁴ On the one hand, a strong franc leads to lower imported inflation, which dampens price pressure. On the other hand, the SNB emphasizes that the negative side effects of negative interest rates, for example on the earnings situation of financial institutions and on investors' willingness to take risks, will have to be given greater weight in the future. As inflation remains stable at present and the interest rate cuts to date are supporting the economy, the SNB and Raiffeisen see no need for additional monetary easing at this time.⁵

Economic growth in Switzerland was significantly weaker in the second quarter of 2025 than at the beginning of the year, after economic output had risen at an above-average rate in the first quarter due to advance exports to the US. Adjusted for these special effects, growth momentum was subdued, in line with the global economic picture. The SNB continues to expect GDP growth of between 1.0% and 1.5% for 2025 as a whole, driven primarily by a robust domestic economy, which is being supported by rising real wages, the easing of monetary policy, and stable consumer spending. At the same time, the outlook for the global economy has clouded over in the wake of high US tariffs and ongoing geopolitical uncertainty, which, according to the SNB's baseline scenario, is likely to cause global growth to lose further momentum in the coming quarters. In the US, price pressure remains high due to fiscal policy stimulus, while inflation in the eurozone is stabilizing close to the target. For 2026, the SNB expects GDP growth of around 1%, which corresponds to a slight slowdown. The labor market is likely to deteriorate somewhat in this environment, with a moderate rise in the unemployment rate.⁶ According to the current forecast, average projections for real Swiss GDP growth are 1.4% for 2025 and 0.9% for 2026. This represents a 0.2% increase in expectations for 2025 compared with the previous quarter. However, expectations for 2026 have been lowered by 0.3%. [6]

_{¹ SNB, Geldpolitische Lagebeurteilung vom 25. September

² SNB, Geldpolitische Lagebeurteilung vom 25. September

³ KOF, Konjunkturbericht, Herbst 2025

⁴ SNB, Geldpolitische Lagebeurteilung vom 25. September

⁵ Raiffeisen, Newsletter Zinsprognose November 2025

⁶ SNB, Geldpolitische Lagebeurteilung vom 25. September}

Rental housing market: Slight slowdown in rent growth for new leases; housing protection initiative as a potential “black swan” for the Zurich real estate market?

The rental housing market in Switzerland continued its upward trend in the third quarter of 2025. Rents for new leases rose by +0.4% compared to the previous quarter, corresponding to an annual increase of +3.6%. This represents a slight slowdown in momentum compared to the previous quarter, but remains well above the long-term average. This development underscores the continuing excess demand, especially in major urban centers. The increase was particularly strong in Zurich, where market rents for new leases rose by +6.2% year-on-year [23]. After a brief lull at the beginning of 2025, the effects of the extremely tight supply of rental apartments are once again making themselves felt. However, rents appear to have reached an upper limit, particularly in the higher price segment, where letting remains difficult as potential tenants are more price-sensitive and willing to spend longer looking for alternatives. Construction activity remains low [14]. The Zurich housing protection initiative of November 30, 2025, is considered a potential “black swan” for the Zurich real estate market, as its adoption would lead to a significant slowdown in construction activity and a further structural shortage of supply.⁷

In the third quarter of 2025, rents for new rental apartments continued to rise in many cantons, continuing the upward trend observed in the previous quarter. With average growth of +1.3%, rents for new leases on older apartments rose again compared to the previous quarter. However, the picture is different for new apartments: here, rents for new leases fell slightly by an average of –0.3% compared with the previous quarter. A look at the cantonal change in rents for new leases for new and old apartments in a quarterly comparison once again shows a clear differentiation between urban centers and peripheral regions. The increase was particularly strong in Zug (old apartments: +4.8%; new buildings: +2.6%), Schaffhausen (old buildings: +5.9%; new buildings: +1.7%) and Zurich (old buildings: +2.4%; new buildings: +1.1%). This development underscores the continuing excess demand in urban centers, where the supply of available rental apartments remains extremely scarce. In Geneva, rent growth continued at a moderate level (old buildings: +1.2%; new buildings: +0.3%), while Basel-Stadt saw slight declines (old buildings: +0.2%; new buildings: –0.9%). In peripheral cantons such as Jura (old buildings: –0.1%; new buildings: –1.1%) and Graubünden (old buildings: –0.5%; new buildings: –2.0%), rents remained stable or declined slightly. Year-on-year (Q3 2024 – Q3 2025), rents for existing buildings rose by an average of +5.0% across all cantons, while rents for new buildings rose by +2.4%, meaning that the Swiss rental housing market will remain highly dynamic in 2025.⁸

Rental housing market – development Q3 2025

new buildings
old buildings

^{Source: FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 3. Quartal 2025}

Construction activity in Switzerland rose slightly in the third quarter of 2025. The Swiss Construction Index (SBV) currently stands at 99 points, which corresponds to an annual increase of 0.6%. The increase in construction activity was particularly strong in the residential construction sector, with a rise of 3.2% compared with the previous year. Construction activity has thus recovered compared with the previous quarter, but remains at a below-average level overall [14, 15]. On the demand side, the resident population continues to grow and exceeded the 9.1 million mark at the end of 2024 [12]. Immigration remains a key growth driver, with the urban regions of Zurich, Zug, and Geneva in particular recording above-average growth [13].

The Zurich housing protection initiative, which will be put to a vote on November 30, 2025, is likely to have a significant impact on the Zurich real estate market if it is accepted. The initiative aims to severely restrict rent increases after renovations and replacement buildings and to oblige owners to have profits and future rents approved by the authorities. Such an encroachment on property rights and economic freedom is likely to reduce the incentive for investment and new construction, thereby further exacerbating the housing shortage. Experience in Basel-Stadt and Geneva shows that similar regulations there have led to a massive decline in building applications and renovations, which in the long term would lead to further supply shortages and market distortion.⁹

_{⁷ NZZ, Der grosse Wohn-Showdown: Vier Initiativen spalten Zürichs Politik vom 10. Oktober 2025

⁸ FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 3. Quartal 2025

⁹ NZZ, Der grosse Wohn-Showdown: Vier Initiativen spalten Zürichs Politik vom 10. Oktober 2025}

Office space market: Stabilization in the third quarter, central locations remain in demand

In the third quarter of 2025, the office market saw a slight counter-movement after weak previous quarters. At the national level, rents for new leases rose by +2.3% compared to the previous quarter, but were down −1.0% for the year as a whole [35]. Despite geopolitical uncertainties, the Swiss office market remained stable overall in the third quarter of 2025, supported by a robust domestic economy and sustained high demand for centrally located, high-quality office space. While digitalization and home office trends have lost momentum, interest in modern working environments that enable social interaction and flexibility is on the rise. At the same time, the conversion of office space into residential space is opening up new opportunities to reduce vacancies and create additional living space in tight markets.¹⁰ The labor market remains subdued, with cyclical industries showing restraint, while real wage increases are providing some support to domestically oriented service locations. No structural impetus is expected in the short term, especially as the KOF forecasts subdued employment growth of 0.6% in its autumn 2025 forecast and a slight increase in the unemployment rate to 2.4% in 2026. This development points to a sideways trend in labor market dynamics, which is likely to stimulate demand for office space only to a limited extent.¹¹

The Swiss office space market presented a mixed picture in the third quarter of 2025. While rents for new leases stabilized in some cantons, other regions continued the downward trend seen in previous quarters. On average across the cantons, rents largely stagnated, with the largest declines observed in Schaffhausen (–5.1%), Graubünden (–5.0%) and Lucerne (–3.4%). In contrast, several cantons recorded positive growth, particularly Neuchâtel (+4.9%), Thurgau (+2.7%), Zurich (+2.0%) and Solothurn (+2.0%), indicating robust regional demand in well-connected markets.¹² A look at the annual trend (Q3 2024 – Q3 2025) shows that rents in some regions are still going down. Particularly sharp declines were seen in Fribourg (–12%), Schwyz (–10.7%) and Ticino (–11.6%), while Zug (–7.7%) and Graubünden (–8.2%) also saw noticeable corrections. In large centers such as Zurich (+0.9%) and Geneva (+2.9%), on the other hand, rents remained stable or rose slightly year-on-year, underscoring the continued segmentation between central and peripheral office markets.¹³

Office space market – development Q3 2025

^{Source: FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 3. Quartal 2025}

The third quarter of 2025 sees a further increase in preference for ESG-compliant office space, particularly in central locations. Institutional investors are observing sustained high demand and lower price discounts for certified properties, while conventional space in peripheral submarkets is under pressure. ESG criteria not only enhance reputation, but also stabilize value in an increasingly segmented market environment. Zurich, Geneva, and other central locations are proving resilient despite the overall economic slowdown, while economically exposed regions are facing declining rents. Sustainable, modern office space remains in high demand and stable in price, while older existing properties that do not meet ESG standards are losing value.

_{¹⁰ Swiss Life, Five theses on the Swiss commercial real estate market, 18. September 2025

¹¹ KOF, Konjunkturbericht, Herbst 2025

¹² FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 3. Quartal 2025

¹³ FPRE, Marktmieten- und Baulandindizes von Renditeimmobilien Schweiz, 3. Quartal 2025}

Yield development: Multi-family homes continue on their path to success, slight recovery in office properties, periphery remains problematic

In the third quarter of 2025, the (rolling) total annual return for multi-family homes remained at a high level, averaging 12.0%, which is slightly above the previous quarter's figure (Q2 2025: 11.5%). This trend confirms the continuing high attractiveness of residential investments in an environment of low interest rates and stable demand. The increase is primarily attributable to a positive return on value change, while the cash flow return remained unchanged at an average of 3.3% [51].

The picture for office properties remains mixed. The (rolling) total annual return rose to 5.2% in the third quarter (after 4.8% in the previous quarter) and thus remains below the previous year's figure of 8.1%. The cash flow yield rose slightly to 3.5% (Q2 2025: 3.4%), while the capital appreciation yield remained low at 1.7% but recovered slightly compared with the previous quarter (Q2 2025: 1.3%). Negative returns on value changes were again observed in several cantons, particularly in peripheral office markets, reflecting the continuing tense market situation in the office segment [52].

A look at the cantonal development of (rolled) total annual returns on multi-family dwellings shows that returns remained stable and high overall in the third quarter of 2025. Double-digit returns were once again achieved in most cantons, with numerous regions managing to increase their figures once again compared with 2024. As in the previous year, the canton of Uri ranks at the top with a total return of 14.7% (2024: 14.2%), followed by Schaffhausen (14.3%) and the two Appenzell cantons (13.9% each). The lowest return was once again observed in Graubünden (8.6%).¹⁴ According to estimates by Switzerland's leading valuation firms, the average minimum discount rate (net, real) for multi-family homes was 1.84% in October 2025, down slightly by 2 basis points compared with the previous quarter [32].

The overall return on office properties, however, remains much more heterogeneous. While some cantons once again reported very high returns, such as Valais (24.2%), Thurgau (17.7%), St. Gallen (16.4%) and Geneva (12.7%), other regions continued to record negative or weak developments. The declines are particularly pronounced in Ticino (–8.7%), Schwyz (–6.8%), Fribourg (–5.1%), and Zug (–4.3%), indicating ongoing value corrections in peripheral and structurally weaker office markets.¹⁵ Cash flow yields remained stable to slightly declining across most cantons, underscoring the continuing uncertainty in the commercial real estate segment [52].

^{Source: FPRE, Marktindizes für Renditeimmobilien, 3. Quartal 2025}

The data for the third quarter of 2025 confirms the continuing high attractiveness of multi-family homes as a stable and high-yield asset class in a positive market environment that continues to be supported by low interest rates and sustained high demand.¹⁶ The data for the third quarter of 2025 shows that the office market remains divided. While central locations and modern, ESG-compliant office space are benefiting from stable demand, peripheral locations with older existing properties remain under pressure. Rising vacancy rates, changing usage requirements, and subdued demand for space in cyclical industries are dampening earnings prospects.

_{¹⁴ FPRE, Marktindizes für Renditeimmobilien, 3. Quartal 2025

¹⁵ FPRE, Marktindizes für Renditeimmobilien, 2. Quartal 2025

¹⁶ Julius Bär Real Estate, Immobilienmarkt-Bericht Schweiz 4.Quartal 2025, 10. Oktober 2025}

Residential property: Price growth continues, abolition of imputed rental value brings momentum to the market

In the third quarter of 2025, price inflation continued on the residential property market, albeit at a slower pace. Overall, prices rose by 0.6% compared with the previous quarter, while a year-on-year increase of +4.5% was recorded.17 Growth was particularly pronounced in the case of condominiums, whose prices rose by 1.6% quarter-on-quarter and by 7.1% year-on-year [62]. Detached houses, on the other hand, performed more modestly: they remained largely stable compared with the previous quarter (-0.1%), but rose by 2.6% year-on-year [56]. On the financing side, the environment remains challenging. At the beginning of November 2025, the SARON remains below the zero percent mark at -0.04%.¹⁸ On September 28, 2025, Swiss voters decided to abolish the imputed rental value, thereby initiating a fundamental change in the real estate taxation system. Overall, the reform is expected to trigger new momentum in the residential property market, particularly through changed financing strategies and shifted investment incentives.¹⁹

Cantonal differences remained pronounced in the third quarter of 2025. Prices for condominiums rose particularly sharply in Basel-Stadt (+4.0%), Lucerne (+3.8%), Uri (+3.9%) and Schwyz (+2.9%). Prices also rose noticeably compared with the previous quarter in Bern (+2.2%), Aargau (+2.9%) and Graubünden (+2.5%). At the lower end of the scale were Schaffhausen (-1.4%), Neuchâtel (-0.5%) and Jura (-0.8%), which recorded slight declines. Year-on-year (Q3 2024 – Q3 2025), the highest growth rates were seen in Schwyz (+11.8%), Basel-Stadt (+13.9%) and Aargau (+10.6%).²⁰

In contrast, single-family homes saw noticeable price declines in several cantons. The most significant decline was in Ticino (–3.2%). However, Nidwalden (–2.6%), Obwalden (–2.5%), Schaffhausen (–2.2%), Appenzell Innerrhoden (–1.4%), Appenzell Ausserrhoden (–1.2%), Uri (–1.0%), Basel-Landschaft (–0.5%) and Graubünden (–0.8%).²¹

This development highlights increasingly regionally differentiated market dynamics. Condominiums continue to benefit from high demand for compact, energy-efficient living space in central and well-connected locations. In the single-family home segment, on the other hand, there are increasing signs of consolidation as demand in peripheral regions is easing slightly and prices are stabilizing at a steady level.

Price development – owner-occupied housing Q3 2025

condominiums
single-family houses

^{Source: FPRE, Transaktionspreis- und Baulandindizes für Wohneigentum Schweiz, 3. Quartal 2025}

The volume of domestic mortgages continued to rise in August 2025, reaching a new high of CHF 1,232.0 billion. Compared with the previous year, this represents annual growth of +3.2%, meaning that growth is continuing at a high level [22]. The current interest rate forecasts by SECO, KOF, UBS, and Raiffeisen assume that SARON will remain at 0.0% until the end of 2026. Yields on ten-year Swiss government bonds are expected to rise moderately to between 0.4% and 0.5% over the same period [18].

The price expectation index for single-family homes remained high in the third quarter of 2025 and continues to signal optimistic market expectations, albeit with slightly less momentum than in the previous quarter [59]. The picture is similar for condominiums, where price expectations have risen again amid stable demand and limited supply [65].

Overall, the data suggests that market participants continue to anticipate positive price developments in the residential property market despite increasing financing barriers and regional consolidation trends, even though growth momentum is becoming increasingly differentiated across regions and there is a clear difference in the development of condominiums and single-family homes.

¹⁷ FPRE, Transaktionspreis- und Baulandindizes für Wohneigentum Schweiz, 2. Quartal 2025
¹⁸ SNB, Current interest rates and exchange rates, November 2025
¹⁹ Julius Bär Real Estate, Abschaffung des Eigenmietwerts beschlossen, 29. September 2025
²⁰ FPRE, Transaktionspreis- und Baulandindizes für Wohneigentum Schweiz, 2. Quartal 2025
²¹ FPRE, Transaktionspreis- und Baulandindizes für Wohneigentum Schweiz, 2. Quartal 2025

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Sebastian Zollinger

Director, Head Real Estate Advisory, Zurich , PwC Switzerland

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PwC Immospektive

Focus on monetary policy: SNB sticks to zero interest rate policy, hurdles for negative interest rates still too high

Rental housing market: Slight slowdown in rent growth for new leases; housing protection initiative as a potential “black swan” for the Zurich real estate market?

Rental housing market – development Q3 2025

Office space market: Stabilization in the third quarter, central locations remain in demand

Office space market – development Q3 2025

Yield development: Multi-family homes continue on their path to success, slight recovery in office properties, periphery remains problematic

Return development Q3 2025

Residential property: Price growth continues, abolition of imputed rental value brings momentum to the market

Price development – owner-occupied housing Q3 2025

How we support you and your company

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PwC Immospektive

Focus on monetary policy: SNB sticks to zero interest rate policy, hurdles for negative interest rates still too high

Rental housing market: Slight slowdown in rent growth for new leases; housing protection initiative as a potential “black swan” for the Zurich real estate market?

Rental housing market – development Q3 2025

Office space market: Stabilization in the third quarter, central locations remain in demand

Office space market – development Q3 2025

Yield development: Multi-family homes continue on their path to success, slight recovery in office properties, periphery remains problematic

Return development Q3 2025

Residential property: Price growth continues, abolition of imputed rental value brings momentum to the market

Price development – owner-occupied housing Q3 2025

How we support you and your company

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