The highest per square metre price, however — between 20,647 and 21,825 francs — can be found in Zug.
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And nowhere in Switzerland are property prices expected to drop in the near future; on the contrary, Neho’s analysis indicates that they will continue to increase.
This is confirmed by data from the Federal Statistical Office, which shows that residential properties in Switzerland are becoming more expensive: in the second quarter of 2024 (that is, from April to June), the prices rose by 1.1 percent in comparison to the previous quarter.
And while 1.1 percent may not seem like a big deal, when you talk about properties with a 1 million-franc price tag, that adds up to a lot of money.
READ ALSO: Why is the price of properties so high in Switzerland?
So why is now a good time to buy a house or an appartment?
While property prices are not expected to budge downward, mortgage interest rates in Switzerland have fallen significantly in the last few months: according to Moneyland consumer platform, “at 1.90 percent, the average annual interest rate for 10-year fixed-rate mortgages is now the lowest it has been since March 2022.”
The average annual interest rate is currently about 1.81 percent for two-year fixed-rate mortgages (FRMs) and 1.79 percent for five-year FRMs.
“This means Swiss fixed-rate mortgages are currently much cheaper” than just a few months ago, when they ranged from 2.31 percent for two-year FRMs to 2.42 percent for 10-year FRMs, said Moneyland analyst Felix Oeschger.
How long will mortgage rates remain low?
While nothing is written in stone, currently many market observers believe that the Swiss National Bank will lower its key interest rate both in September and in December of this year.
“That scenario should, at least in part, already be priced into mortgage interest rates, which would indicate a tendency towards further drops in fixed-rate mortgage interest rates,” Oeschger said.
All this indicates that if you are in the market for a home or an apartment, now is a good time to apply for mortgage — provided, of course, you have enough money (20 percent of the total property cost) to put as a down payment and pay monthly charges afterwards.
READ ALSO: How long do you have to work for to afford a home in Switzerland?
Can a foreigner obtain a mortgage in Switzerland?
A citizen of an EU / EFTA state can freely purchase real estate (home or land) in Switzerland. This applies to both primary residence and holiday homes.
The same is true for third-country citizens, say US or UK nationals, who have a valid permanent residency B or C — there are no restrictions placed on them either.
However, rules are in place for people from outside Europe who don’t have either of the two above-mentioned residency permits.
They will need a permission to purchase housing in Switzerland — a measure intended to prevent Swiss properties from falling into foreign hands.
Additionally, they can only buy a house which will be used as the primary residence — this means that they can’t buy it as an investment and rent it out.
And if you are a cross-border worker in Switzerland (G permit), you can buy a second home in the vicinity of your place of employment without authorisation. However, you are not allowed to rent out this property for as as long as you work in the region as a cross-border commuter.
Are you eligible for mortgage?
Whether you are a foreigner or Swiss national, the same rules apply: you should have solid financial standing to be eligible for mortgage — or any other loan for that matter.
The bank will look at your salary to make sure you can afford monthly payments, as well as your creditworthiness.
That information is available from the ZEK (Zentralstelle für Kreditinformation or Swiss Central Credit Information Bureau), which operates a central database which only banks and loan providers can access.
Basically, all your credit history, which includes your credit card use, loans, history of all open or denied credit applications, account overdrafts, and other such information is stored in there.
However, ZEK contains not only the negative data. If you are diligent about paying all your bills on time and not having any arrears or debts, then this information is included there as well, and will serve you well if you apply for mortgage.
READ ALSO: Does having a good credit score matter in Switzerland?
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