Real estate market 2026 stable tailwind from low interest rates, AI boom and scarce space
The National Bank's interest rate freeze, high valuations on the real estate markets and a global surge in investment in artificial intelligence will shape the investment year 2026. While Wüest Partner expects financing costs to remain low and price momentum to slow on the Swiss construction and real estate market, Zürcher Kantonalbank sees opportunities in real estate, corporate bonds and selective equity segments. With continued moderate growth and falling inflationary pressure.
According to estimates, the Swiss National Bank is leaving the key interest rate at 0% for 2026 and signaling that the hurdles for a return to negative interest rates remain high. The conditional inflation forecasts of around 0.3% for 2026 and 0.6% for 2027 are clearly within the range of price stability and support a moderate growth scenario. For the real estate market, this means that short-term financing, particularly SARON mortgages, will remain attractive, while long-term fixed-rate mortgages will only benefit hesitantly from monetary easing.
Real estate as an investment
Wüest Partner has observed that investment properties with rental apartments will become significantly more expensive again in 2025, reflecting a high willingness to pay and strong confidence in the asset class. At the same time, prices for multi-family homes have reached a very high level, while earnings prospects and regulatory risks are dampening the imagination. A flattening of price momentum is therefore expected for 2026, both for residential yield properties and commercial properties. With clear differentiation according to location, property quality and ESG profile. Indirect investments such as public limited companies and funds continue to benefit from the low interest rate environment, but already carry high expectations in the form of above-average premiums.
Boost in renovation, moderate new construction
The combination of low interest rates and slowing construction price momentum is stabilizing the willingness to invest in construction. Nominal growth in construction investment of around 3.4% in new construction and 8.5% in renovation is expected in 2026, with the renovation sector receiving an additional boost from pull-forward effects related to the planned abolition of the imputed rental value. Many owners are likely to prefer energy-efficient renovations and refurbishments as long as maintenance costs are still fully tax-deductible. In the medium term, new construction activity could slow down again somewhat, as the number of new apartments in planning applications has recently declined.
Rental and property market
Following the sharp rise in rents in 2023 and 2024, the growth in asking rents has slowed considerably. Moderate growth in the national average is expected for 2026. At the same time, the reduction in the mortgage reference interest rate will provide relief for existing rents. This could lead to a slight decline in average rents for existing properties. Demand for residential property remains intact despite higher price levels. For 2026, price increases of around 3% are expected for single-family homes and slightly less for condominiums, albeit at a slower pace than in previous years.
Investment outlook for 2026
Zürcher Kantonalbank expects moderate global economic growth in 2026, driven by falling inflationary pressure and improved financing conditions. Advances in artificial intelligence are driving investment and providing an additional tailwind for US equities in particular, while uncertainty on the financial markets remains high. In this environment, broad diversification across asset classes and currencies is recommended, with selected areas of focus. Corporate bonds, Swiss real estate and small caps are considered attractive, supplemented by global corporate bonds and gold as stabilizing additions. Direct and indirect real estate investments therefore remain an important building block for long-term investors. Embedded in a portfolio that benefits equally from AI-driven growth and the persistently low interest rate environment.