Keystone
The risk of a bubble on the Swiss real estate market increased in the first quarter of 2026. Although the “Swiss Real Estate Bubble Index” compiled by the major bank UBS still only shows a “moderate” bubble risk, the trend is clearly pointing upwards.
According to a statement on Thursday, the index rose by 0.23 to 0.69 index points in the first quarter of 2026. The index had already risen significantly in the previous quarter and even recorded the strongest quarterly increase since 1989, it was reported at the time. The risk area starts at 1.0 index points, which is not too far away. Above 2.0 points, there is talk of a real estate bubble.
“Zero interest rates and a weak economy are leading to rising risks on the home ownership market,” writes UBS in its press release on the index. Household debt in particular is rising faster than incomes. While home prices rose by 3.5 percent in the first quarter, according to UBS, household incomes declined despite higher inflation.
Slight slowdown expected
UBS experts expect a gradual slowdown in demand for owner-occupied homes in the coming quarters. In nominal terms, however, the price increase should still be around 3 percent. This would once again outstrip income and rental growth.
Prices for residential property are also likely to remain high in the longer term. “Absolutely low interest rates and comparatively low usage costs make a price correction unlikely,” write the UBS analysts. The low level of new construction activity speaks against a bubble, although there is a slight upward trend, they continue.