The danger of a housing bubble continues to increase (cross-border guide)

Context

In a nutshell

• The danger of a real estate bubble continues to increase
• The UBS Swiss Real Estate Bubble Index stood at 0.72 points in the second quarter of 2026
• Real estate price growth in Switzerland has been remarkable in recent years, especially in areas such as Zurich and Geneva

Key facts

• What: danger of real estate bubble
• When: continues to increase
• Who: UBS
• Why: Real estate price growth

The risk of a real estate bubble continues to increase in Switzerland, although it still remains relatively low, according to the relative index calculated by UBS. The index, known as the UBS Swiss Real Estate Bubble Index, measures the level of premium real estate prices over their market values. In the second quarter of 2026, the index stood at 0.72 points, an increase from 0.65 points in the previous quarter.

Real estate price growth in Switzerland has been remarkable in recent years, especially in areas such as Zurich and Geneva. According to data from the Federal Statistical Office (OFS), apartment prices in Zurich have increased by 40% in the last 5 years, while in Geneva they have increased by 35%. This is partly due to the growth in demand for real estate, especially from foreign investors.

However, rising real estate prices can also be a sign of a real estate bubble in the making. According to UBS, the risk of a housing bubble is highest when the prices of

Operational details

Both household debt and house prices have risen significantly higher than incomes, leading to an increase in market risks, UBS specialists note. The persistence of low interest rates and the scarce supply of new homes have led to an acceleration of the dynamic.

According to UBS experts, the Swiss real estate sector is particularly vulnerable to the risk of a real estate bubble. House prices grew faster than incomes, with an average annual increase of 5% between 2020 and 2022, according to data from the Federal Statistical Office (FSO). In particular, the average house price in Switzerland rose from CHF 440,000 in 2020 to CHF 510,000 in 2022.

The situation is particularly critical in some regions of Switzerland. For example, in Zurich, the average house price rose from CHF 640,000 in 2020 to CHF 780,000 in 2022, according to data from the Swiss Association of Realtors (SVA). In Geneva, the average house price rose from CHF 730,000 in 2020 to CHF 850,000 in 2022, according to data from the Geneva Association of Realtors (AGI).

The scarce supply of new homes is one of the main factors contributing to the increase in prices. According to FSO data, new home construction in Switzerland increased by only 2% in 2022 compared to 2021. In particular, the construction of

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Key points

A nominal price increase of between 3.5% and 4.0% is expected in the whole of 2026. The danger of a real estate bubble continues to increase, but it is still relatively contained. It is important to monitor the situation and take preventive measures to avoid an excessive increase in prices.

Switzerland, in particular, is a very dynamic real estate market, with high demand and a shortage of offers. According to data from the Federal Statistical Office (OFS), the average price per square meter in Switzerland is about CHF 7,500. However, there are significant variations between different cantons and cities. For example, in Zurich, the average price is about CHF 10,000 per square meter, while in Bern it is about CHF 6,500.

The danger of a real estate bubble is particularly high in some regions of Switzerland. For example, in Geneva, the average price is around CHF 14,000 per square metre, which is more than double the average price in Switzerland. This is due to the high demand and scarcity of offers in the city, which is a major financial and business center.

To avoid an excessive increase in prices, it is important to take preventive measures. One of the main ones is to increase the amount of real estate available on the market. This can be done through the construction of new buildings or the conversion of existing spaces. In addition, it is important to monitor the demand and supply on the market, so that you can predict any

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Source: tio.ch