The Increasing Affordability Gap in Swiss Home Ownership: A Closer Look at the Challenges and Forecasts

The cost of home ownership in Switzerland is on the rise, making it increasingly difficult for many households to afford a property. While Switzerland has a lower home ownership rate compared to other countries, recent figures from UBS suggest that only 15% of Swiss households can afford the “median home” today, compared to 60% two decades ago.

Between 1970 and 2015, the home ownership rate in Switzerland steadily increased due to the rise in condominium ownership. However, since then there has been a decline of around 2 percentage points, with this trend expected to continue in the coming years. Despite these challenges, the desire to buy a home remains strong among the Swiss population.

Affording a home in Switzerland can be particularly difficult in major cities and their surrounding areas, where households may need double or triple the Swiss median income to purchase a property. Financial institutions typically require a household to have an annual gross income of 150,000 francs to afford the median home, which is significantly higher than the median household income of 115,000 francs.

Market prices for homes in Switzerland are often higher than what the average household can afford, making it difficult for some families to secure a mortgage for a property. Despite these affordability challenges, UBS economists predict that home prices will continue rising in 2023 due to an influx of wealthy individuals from abroad and strong growth in upper incomes contributing to demand for homes in Switzerland.