Zurich scraps the old rule on renting and buying

In the canton of Zurich, home ownership became even more expensive in the second quarter of 2026. At the same time, rents for existing apartments are falling slightly. As a result, buying is no longer automatically the better option. Those who stay in the same apartment for a long time often end up paying less. Those who have to move face a different set of costs.

In the canton of Zurich, the old rule of thumb that homeownership is more affordable no longer holds true in every situation. While home prices rose again in the second quarter of 2026, many long-term renters were actually paying less than before. The decisive factor is therefore no longer just a comparison of monthly costs, but whether someone can stay where they are or has to look for a new place.

The latest data show diverging trends. The Zurich Homeownership Index rose by 0.4 percent in the second quarter of 2026 compared to the previous quarter and was 2.2 percent higher than the previous year’s figure. Locations on Lake Zurich and in the city of Zurich remain particularly expensive. At the same time, the rental index for existing housing stock in the canton of Zurich fell by 0.4 percent compared to the previous quarter and was 1.1 percent below the figure for the second quarter of 2025. This is noticeably changing the cost dynamics in the housing market.

Staying Put Offers a Price Advantage
For many households, the financial advantage today no longer comes primarily from moving into home ownership, but from remaining in their current rental apartment. This is due to what is known as the “stay-put bonus.” Rents for existing units are often significantly lower than the prices charged for comparable units when a new lease is signed. Recently, this gap has tended to widen rather than narrow. For homeowners, developers, and investors, this is an important signal because the market’s willingness to pay is increasingly splitting into two segments: affordable older properties on one hand, and expensive new rentals and scarce owner-occupied housing on the other.

Those who have to move calculate differently
The math is different for households that have to change their place of residence. In such cases, it is not the lower existing rents that serve as a benchmark, but rather the higher asking rents. Despite high entry prices, homeownership can once again become competitive in such situations, provided that the necessary equity and financial capacity are available. The difference between existing and asking rents is thus not only an issue for tenants but also for the marketing of new-construction apartments, pricing in transactions, and the strategic positioning of residential projects.

Interest relief only mitigates costs in the existing rental market
Added to this is the reference interest rate, which has remained unchanged at 1.25 percent in Switzerland since June 2, 2026. It primarily affects existing leases and has facilitated further reductions in those cases. However, this does not resolve the shortage in the supply market. Available forecasts instead suggest that asking rents in the canton of Zurich will continue to rise, and that home prices will also increase—albeit at a more moderate pace than in recent years. For the industry, this means that the market remains tight, but the cost considerations for renting versus buying are shifting much more significantly than before, depending on the household.

For the Zurich housing market, this is more than just a consumer issue. If long-term leases remain decoupled from new lease rates in terms of price, while homeownership remains expensive, mobility within the existing housing stock will be restricted. This is precisely where the friction arises that is likely to continue shaping the rental market, real estate development, and the homeownership market in the coming quarters.