Property prices have fallen recently in neighbouring countries like Germany, France and Austria. But in Switzerland the price spiral continues undeterred. The reason behind this is an ever-growing population in the small Alpine country.
A new forecast published by the Federal Statistical Office (FSO) anticipates that the number of residents will climb from nine million to 10.5 million over the next 30 years. So, investing in a home, it seems, is a good idea.
“People over 60 tend to sell their homes,” says Hendrik Budliger, founder and director of Demografik, an independent competence centre for demographics. “That’s why we will soon see more people putting their properties on the market. The 60-year-olds also belong to the generation with the highest rate of home ownership.”
By contrast, the younger generation tends to live in smaller households. In 2024, Switzerland’s birthrate dropped to a record low of 1.28 children per woman. “Sooner or later, we will have too many single-family homes and not enough families to buy them,” says Budliger.
The first signs indicating a shift in the market are already on the horizon. Budliger expects this trend to accelerate from 2030 onwards, as many homeowners will be so heavily indebted that their pensions will not be enough to renew their mortgage.
The impact, however, will vary widely by region. The major urban areas, Budliger says, will be the last to feel the shift. The notion that urban centres are more crisis-resilient is widely accepted amongst experts.
A recent study by the real estate platform Zillow backs this up with hard numbers for the US. There, a looming demographic-driven dip in the property market is known as the “silver tsunami”. However, the study concludes that this “silver tsunami” will not ease soaring property prices, largely because many of the homes hitting the market are in less desirable areas.
Sarah Dickerson of the University of North Carolina, who researches the social aspects of the real estate market, supports this finding. “Many baby boomers live in suburbs or rural areas, so the homes entering the market may not match the needs of working-age people who want to live closer to cities.”
According to Switzerland’s largest bank UBS, Swiss regions facing both an ageing population and outward migration risk “a scenario of rising vacancies and falling property prices”. This applies particularly to mountain regions in Graubünden and Bern, and to the southern canton of Ticino.
Claudio Saputelli, head of real estate analysis at UBS, believes that this trend only affects certain regions. He does not see a “silver tsunami” sweeping across central Switzerland in the near future. “Pensioners will not just die from one day to the next,” he says, adding that they need to be replaced on the labour market. “This more than compensates for the baby-boomer effect.” Saputelli admits that single-family homes may no longer be the most popular form of housing. “On the other hand,” he says, “the scarcer they become, the more expensive they will be.”
According to the Federal Statistical Office, the Swiss population will continue to grow until 2043 before gradually declining, even under the lowest-growth scenario. This means that demand for housing is likely to continue to rise for close to the next two decades.
Budliger says that today’s property buyers must keep this timeframe in mind. After all, most people live in their houses for around 20 years. If prices crash more than expected, the current generation, which is used to mortgages of one million Swiss francs or more, could face a hard financial landing, but they would not be the only ones.
At around CHF1.3 trillion ($1.58 trillion), Switzerland’s mortgage volume is only one-third lower than that of Germany, a country nine times its size. From a demographic point of view, Budliger considers this to be a massive risk. But for now, his warning remains a lone voice in Switzerland, the land of concrete gold.
