Equity Trap: Swiss Households Save Twelve Years Instead of Four for a Home

The gap between prices and saving power

A recent study by the Raiffeisen Group, cited in the NZZ, shows a clear decoupling of property prices and the saving power of young Swiss households. In 2010 an average young household needed about four years to accumulate the equity for a condominium. Today it is about twelve years.

In 2025 alone, further price increases extended the necessary saving period by around 1.2 years. For an average property on the Swiss market, buyers must currently bring around 190,000 francs in equity and demonstrate an annual household income of about 165,000 francs. Ten years ago 140,000 francs of equity and an income of 123,000 francs were sufficient.

Why the gap is widening

The shift is driven by a double movement. Property prices have risen faster than wages for years, while the loan-to-value ceiling of 80 percent (Säule 3a, the private pillar 3a pension, the Pensionskasse occupational pension fund and the bank mortgage combined) remains fixed by regulation, with at least 10 percent in hard equity outside the second pillar. Anyone who wants to buy has to save disproportionately more as soon as prices rise.

The banks' affordability rule sharpens the situation further. It requires that imputed housing costs, calculated at an interest rate of around 5 percent, must not exceed one third of gross income. As soon as the price of a property goes up, so does the income requirement, regardless of actual market interest rates.

Consequences for the market

The widening gap between saving capacity and price level means that ever fewer households can buy without family support. A growing share of first-time purchases in Switzerland is now co-financed through Erbvorbezug (an advance on inheritance), gifts or withdrawals from a Pensionskasse. The Säule 3a is also increasingly being maximised with a later home purchase in mind.

Households relying solely on their own savings are increasingly turning to cheaper regions outside the economic centres or postponing the purchase to a later stage in life. The study illustrates a shift in homeownership, away from a traditional middle-class entitlement and toward an asset that is barely attainable without intergenerational capital.

Outlook

Short-term relief is not in sight. As long as immigration, tight supply and low capital market rates continue to push prices upward while wage growth lags behind, the time needed to save for an equity stake will likely continue to lengthen. A noticeable correction would require either a marked rise in interest rates, a fall in prices or a substantial wage increase. None of the three scenarios is considered likely in most forecasts for 2026.