The rise in risk in the housing market is levelling off
The Swiss residential property market appears less overheated in the second quarter of 2026. MoneyPark’s risk index has fallen from 3.7 to 3.5 points. However, it is still too early to breathe a sigh of relief, as unemployment, strict affordability rules and significant differences in interest rates between mortgage providers continue to act as a brake on the market.
The decline represents more than just a technical correction. It brings to an end an uninterrupted rise that has been in place since the third quarter of 2023 and pushes the Real Estate Risk Index back to the upper end of the medium-risk range. The drivers behind this are the improved industrial economy, slightly weaker real price growth in the residential property market and the continued extremely low level of interest rates.
At the same time, the rebound remains fragile. The Purchasing Managers’ Index rose to an average of 56 points in the second quarter of 2026, up from 52 points in the previous quarter. The labour market, however, continues to face pressure. The seasonally adjusted unemployment rate stood at 3.1 per cent in May 2026, and MoneyPark also cites the increased financial strain on individual households as a risk to demand for home ownership.
Prices continue to outpace inflation
Despite the falling risk index, there is no sign of a relaxed market. Price growth for owner-occupied homes was still 3.8 percentage points above inflation in the second quarter. In the previous quarter, the figure was 4.2 percentage points, and a year ago it was 5.0 percentage points. The momentum is therefore slowing, but a broad price correction is not materialising due to tight supply and high willingness to pay. For owners and developers, this means that the market remains robust, but purchasing decisions are becoming more sensitive to location and quality.
Mortgages remain a price war with its pitfalls
The gap is particularly pronounced when it comes to financing. The SNB’s key interest rate remained at 0 per cent in the second quarter of 2026, whilst at the same time the spread between ten-year and two-year swap rates narrowed to around 0.45 percentage points. Nevertheless, the market has not become any easier for borrowers. According to MoneyPark, the difference between the cheapest and most expensive offers for ten-year fixed-rate mortgages recently stood at around 0.96 percentage points. This can amount to a difference of several thousand francs per year and intensifies the pressure on households with limited affordability to choose carefully.
Immigration is losing momentum and regions are drifting apart
Another setback comes from demographic trends. The rolling 12-month net migration figure for the permanent foreign resident population fell from around 83,400 people at the end of 2024 to around 69,900 in May 2026. This represents a decline of 16.2 per cent. The additional demand for home ownership is thus declining, but it is not disappearing. The regional distribution is particularly striking. According to MoneyPark, 86 per cent of future population growth is concentrated in just eleven cantons. As a result, the market is likely to react less uniformly across the country, but with even greater regional disparities.
For the coming quarters, MoneyPark expects the index to move sideways or fall slightly. It remains to be seen whether weaker immigration and rising construction activity will actually create more supply at a regional level. This is precisely what will determine whether the first easing of pressure in three years turns out to be more than just a brief respite.