Buying a Multi-Family House in 2026: What the Current Market Environment Means for Investors

What the Market is Showing Right Now

The Swiss rental housing market is experiencing a pronounced supply shortage. The percentage of listed rental apartments is currently only 1 percent, close to the historic low. Anyone looking for an apartment knows this from personal experience or by hearing about friends and family.

At the same time, too little is being built. Raiffeisen Economic Research has shown in their current real estate study that residential construction planning activity has fallen to a new low by the end of 2025. Measured against the housing stock and the population, the number of newly submitted building applications is around 30 percent below the long-term average. And the apartments that are being built are smaller than before: In 2025, a new apartment averaged only 88 square meters, compared to 105 square meters 15 years ago.

So supply is not increasing. But demand is.

If you want to see for yourself, just open one of the major real estate portals. Multi-family houses for sale are few and far between on Comparis, Immoscout24 or Homegate. What does appear is often gone within days or passed on privately before even going online. That is no coincidence. Investors know what the market is worth and don't wait for long.

Immigration is indeed slightly declining, but domestic demand is filling the gap. Raiffeisen puts it aptly: While foreign newcomers need a flat immediately and are less price-sensitive, Swiss nationals build up their pent-up demand more slowly but steadily. This wave has not yet crested. It is still coming.

What This Means for Returns

Those who hold or want to buy a multi-family house as an income property benefit from several factors at once.

Although asking rents have risen a bit more slowly since the beginning of 2024, this brief pause is clearly coming to an end. The dampening effects of the decreased reference interest rate will expire in the second half of 2026. And the higher energy prices resulting from the Iran conflict will, via construction costs, gradually be reflected in higher rents for new builds. Anyone who owns a well-let multi-family house today is sitting on a source of income that is likely to continue to appreciate in the medium term.

At the same time, financing costs remain low. The Swiss National Bank sees no reason to raise interest rates. The SNB policy rate will remain at the current level for the foreseeable future. This means: SARON mortgages remain inexpensive, and fixed-rate mortgages for 5 or 10 years are also in a range that makes investment properties much more attractive than three years ago.

What Banks Review in MFH Financing

This is where the real hurdle lies for many investors. Not the market, not the interest rates, but the financing structure.

For an owner-occupied home, the bank assesses affordability based on the owner's income. For a multi-family house, it's different. The bank primarily values the property as an investment and asks the following questions:

Income value: How high are the sustainable rental incomes, and what does this yield as the income value of the property? Banks use a capitalization rate that depends on location, condition, and tenant structure—generally between around 3 and 5 percent. The lower the capitalization rate, the higher the recognized value and the more external capital is possible.

Lending limit: For investment properties, most banks finance a maximum of 75 percent of the income value. This means: 25 percent equity is mandatory, and this usually must come from your own funds, not from other mortgages.

Affordability: Even for investment properties, the bank calculates with a notional interest rate of 5 percent. Rental income must cover interest, amortization and maintenance at this stress scenario. This is the hurdle many investors underestimate, especially if the property also has vacant units or if the current rent is below market level. In practice, this often means financing offers from banks at a maximum loan-to-value of 60-65%. That means suddenly you don't just need 25% equity, but 35-40%, which reduces your return on equity as an investor.

Tenant structure and condition: Banks are not real estate funds. They want to know who the tenants are, how stable the rental income is, and whether major investments are due in the next few years. A newly renovated multi-family house in a suburban area with stable tenancy gets better terms than an old building with high turnover in a peripheral location.

Why Comparison Is Particularly Valuable Here

With owner-occupied homes, many buyers believe that the differences between banks are minimal. That may be true for loan-to-value ratios for new properties intended for personal use. But with multi-family houses, it is fundamentally different.

Banks calculate the income value using their own models. The capitalization rate varies from institution to institution. A bank that capitalizes at 3.8 percent recognizes a much higher value than one that calculates at 4.5 percent. This difference can quickly amount to CHF 300,000 or more in recognized loan potential for a property worth CHF 3 million.

This means: If you only ask your house bank, you may never see what would be possible elsewhere. And if you bring too little equity because the income value was calculated conservatively, you might lose the property to someone who just had a better-fitting banking relationship or a professional deal advisor.

Don't Forget Tax Considerations

With the abolition of imputed rental value from 2029, the tax situation for investors with income properties held in personal assets will also change.

Interest on debt will generally no longer be fully deductible for individuals starting from 2029. If you hold a multi-family house as a personal asset, you can only deduct the mortgage interest in proportion to the share of investment properties in your total assets. This could noticeably increase your tax burden.

Anyone buying or owning a multi-family house today should therefore check early on whether holding it as a personal asset or in a real estate corporation (AG) is the better solution. In a corporation, interest on debt can still be deducted as an operating expense. However, the decision depends on many factors and should be made together with a tax advisor.

What to Do Now in Concrete Terms

Whether you want to buy, refinance or strategically realign a multi-family house: The next two to three years offer a window of opportunity that has rarely been so favorable.

Low financing costs, a structurally tight supply, stable and prospectively increasing rental income, and an SNB that is not planning any interest rate hikes. Those who finance wisely in this environment lay a solid foundation.

You should keep three points in mind:

First: Don't just ask for one rate; have the income value calculated by several institutions. The differences can be significant.

Second: Assess your equity situation realistically. 25 percent equity is the minimum, and the bank does not count everything that feels like equity on paper.

Third: Keep the tax structure in mind. What is inexpensive today as a personal asset may become more costly from 2029. Changing this decision later is only possible with considerable effort.

At hypothek.ch, we compare the terms and valuation approaches of various institutions for you—not only the interest rate, but also the recognized income value and structuring options. Especially with multi-family houses, this makes a significant difference. We guide you through the entire process, independently, without self-interest in any particular bank, and with a focus on the overall picture.

Legal Notice

This article is for general information and does not replace individual financial or tax advice. Return calculations and tax impacts depend on your personal situation and the canton. We recommend seeking independent advice before making investment decisions.

Source: Raiffeisen Economic Research, Real Estate Switzerland 2Q 2026