New Report Shows Buying a Home in Switzerland Could Soon Be Cheaper Than Renting

According to a recent report from UBS, purchasing a home in Switzerland may soon become more economical than renting over the long run. The report suggests that due to high rental costs and anticipated decreases in interest rates, the average expense of a Swiss mortgage is expected to decline sufficiently, making buying property financially advantageous.

The Cost of Buying vs. Renting in Switzerland

As of March 2024, the average yearly expense for owning a 4.5-room apartment in Switzerland (including down payment, fees, and mortgage) was 32,500 francs, which is 7 percent higher than renting a similar property annually. However, UBS observes that the cost of homeownership has been decreasing relative to rental expenses, with homeownership being 16 percent more expensive than renting in the summer of 2023. For instance, individuals who secured a long-term mortgage in mid-2023 are projected to have annual expenses of 50,000 francs by 2033.

Already More Affordable to Own in Certain Regions

Presently, owning a home is already more cost-effective than renting in Canton Vaud, Fribourg, and Valais, factoring in housing taxes, utilities, and mortgage costs over the mortgage term. The trend is expected to extend to other regions such as Bern, Solothurn, Aargau, Schaffhausen, and Thurgau by the following year.

Anticipated Challenges for Prospective Buyers

Despite the potential long-term cost benefits of buying versus renting, many face significant initial financial obstacles to homeownership in Switzerland, including down payments and fees. This contributes to Switzerland maintaining the lowest homeownership rate in Europe. A November 2023 report from Wüest Partner revealed that homes are on average 9 percent too expensive for families to purchase.

In Zug, house prices exceed what two working individuals with a mortgage in the canton can afford by 49 percent, rising to 63 percent for single-family homes. In contrast, only seven Swiss cantons offer apartments within the budget of an average local family, dropping to just two for single-family homes.