The dynamic rental price trend means that buying is once again considered a more attractive form of housing compared to renting. Older owners can also withdraw capital from their home early with a residential pension.

The pace of immigration has slowed noticeably in 2024, with net migration 15% lower than in the previous year. Nevertheless, it remains high this year. The continuing strong demand for labor due to an intact economy and demographic effects are keeping population growth at a structurally high level.

However, private consumption is developing much less dynamically than last year, which is why the Swiss economy is only growing moderately. In comparison with neighboring countries, however, Switzerland is holding up better. This is mainly because the crisis in industry is less pronounced. After GDP growth of 0.8% this year, growth of 1.3% is expected in 2025, Raiffeisen economists summarize the development in their study 'Real Estate Switzerland Q3 2024'.

Falling vacancy rates

The high rental price momentum and the low supply ratio in the rental apartment market lead Raiffeisen experts to conclude that vacancy rates will fall significantly. «We expect vacancy rates to fall below the psychologically important 1% mark in September 2024», says Michel Fleury, economist at Raiffeisen Economic Research.

In fact, rental price momentum continues to accelerate. New rents have risen by over 6.4% within a year. «The growing housing shortage will keep rental price growth high for the foreseeable future», Fleury is convinced.

Flattening of price momentum for owner-occupied homes likely to come to a standstill

Demand for residential property has also largely recovered and the currently still elevated supply ratio in the owner-occupier market is likely to decrease again soon. «The flattening of price momentum that has persisted until recently should therefore soon come to a halt. However, price increases like those seen during the coronavirus pandemic are still not to be expected», says Fleury.

Many retirees are sitting on a large, tied-up capital stock

Pensioners have a lot of illiquid capital tied up in their homes. «Homeowners in Switzerland are ageing rapidly. A large proportion of owners are already retired. Thanks to the dynamic price development of the last 20 years, many retired property owners are sitting on a large amount of capital tied up in their property», says Fleury. And he continues: «However, drawing on this capital to realize long-cherished dreams, support heirs or improve their financial situation is often difficult due to the affordability hurdle.» He sees the concept of a residential annuity as a way of withdrawing capital from a home early without having to leave your home of many years.

Residential annuity secures usufruct or right of residence despite sale

The residential annuity offers an opportunity to sell your residential property during your lifetime without having to move out of it, thanks to a sale combined with usufruct or right of residence. Although the property is transferred to a buyer, its continued use by the former owners is ensured by means of an easement entered in the land register. While a right of residence only grants personal use of the property, usufruct also allows the property to be rented out to third parties. «This solution is regularly used today when a property is passed on within the family. In the sense of an advance inheritance, it can ensure that the parents remain in their own home if their financial situation would actually force them to sell», explains Fleury.

However, selling a property with a lifelong right of residence can also be an interesting option if there are no heirs or if they are unable or unwilling to take over the property, adds Fleury. «This is because such a sale guarantees the owners a right to remain in the property for as long as they need it and can also free up missing financial resources.»