Rents and Real Estate
How 0% Interest Rates Are Changing the Game in Switzerland
Since March 2024, the Swiss National Bank (SNB) has initiated a series of cuts to its key interest rate amid an economic slowdown and subdued inflation. On June 20, 2025, it took another historic step by lowering the rate to 0%.
This decision aims to boost lending and support the national economy. But what are the practical consequences for households, businesses, and especially for people on the move?
Lower rates, a still tight property market
By gradually lowering its key interest rate, the SNB has caused mortgage rates to fall, particularly variable-rate mortgages (SARON). In 2024, condominium prices rose by 4.2%, while single-family homes rose by 3.4% on average.
However, home ownership remains difficult in urban centers popular with international talent (Zurich, Geneva, Lausanne). Reasons include consistently high prices and strict financial requirements. For mobile employees, home ownership remains a marginal option.
Did you know? More than 90% of the people we assist at Welcome Service opt to rent due to these barriers to entry.
The rental market: adjustments and pressure
The most visible effect of lower interest rates for tenants is the reference interest rate used to regulate rents. This rate was lowered in 2024, paving the way for requests for rent reductions in existing leases.
But in reality, demand for housing remains higher than supply. The housing shortage – exacerbated by low construction activity – continues to put upward pressure on rents, especially in large cities.
New arrivals often have to find accommodation at short notice without a complete track record. This is where our expertise comes in: we intervene before they take up their position to anticipate market tensions and secure rental applications.
An opportunity for international companies?
For employers, this development can have a twofold impact:
- Attractiveness: Making Switzerland more attractive to foreign talent thanks to a slight rebalancing of the rental market.
- Optimization: Taking advantage of a slightly less tense environment than in 2022–2023 for family homes and mid-range properties.
Regional disparities remain critical. Zurich and Lausanne are extremely tense, while Neuchâtel or parts of Valais offer more room for negotiation.
What are the medium-term prospects?
In the short term, pressure on rents will not disappear. In the medium term, development policies and construction capacity will be decisive. Employers and expatriates will need visibility and flexibility.
Choosing the right canton, understanding local regulations, and anticipating deadlines are all factors that influence the success of a relocation.
Summary of the current situation:
◉ Lower interest rates — now set at 0% — ease the pressure on financing, but do not solve the housing shortage. ◉ Rents could slow down — but remain subject to strong pressure in major centers. ◉ Relocation assistance — remains a key lever for securing talent mobility in a changing market.
Sources
- [1] SNB – Monetary policy decision, June 2025 Link
- [2] Piguet Galland – Falling mortgage rates in Switzerland Link
- [3] Wüest Partner – Key interest rates and real estate Link
- [4] L’Agefi – The Swiss real estate market under scrutiny Link
- [5] FOH – Reference interest rates for rents Link
- [6] UBS Real Estate – Quarterly analysis Link
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