No to the 10-Million Initiative: What the Referendum Means for Real Estate Prices and the Mortgage Market

The SVP initiative aimed to cap the permanent resident population at ten million by 2050 and to require the Federal Council to implement corrective measures in asylum, family reunification, and ultimately in the free movement of persons with the EU once the population hits 9.5 million. Out of 23 cantons, 13 voted against with a voter turnout of 58.9 percent, resulting in a clear rejection. The outcome indirectly supports one of the most important pillars of Swiss real estate demand: immigration.

What the numbers on population development show

Switzerland currently has around 9.1 million inhabitants. Without migration, according to UBS analysis, the permanent resident population would shrink to about 8.5 million by 2050, because the birth rate has been below the replacement level for years. The migration balance from the EU and EEA is 40,000 to 50,000 people per year, the total migration balance is 60,000 to 70,000.

This order of magnitude explains why population growth is considered a structural support for housing demand. Every additional resident generates a need for apartments over time, whether for rent or purchase. Approval of the initiative would have reduced annual net immigration by around 20,000 people below the average of the last two decades. With the rejection, this demand component remains intact.

UBS did not expect a short-term price drop

In their preliminary analysis, UBS economists Matthias Holzhey and Maciej Skoczek did not expect any immediate price correction, even if the initiative were accepted. However, they pointed to a likely trust effect: Investors would have demanded higher risk premiums, long-term return assumptions would have been lowered, and the price of yield properties would have adjusted accordingly.

With the 'No' vote on June 14, this scenario does not materialize. For indirect real estate investments, i.e. listed funds and real estate investment trusts, this leaves the valuation logic unchanged. Institutional buyers, who have increasingly invested in residential properties in recent quarters, are unlikely to reduce their allocations.

Regional divergence likely to continue

Adoption would have further increased the already visible divergence between centers and periphery. UBS expected that Zurich, Geneva, and Basel as well as strong regional centers would have performed significantly better than peripheral regions even under stricter migration. Declining tax revenues in peripheral areas would have put investments in transport, education, and basic services at risk—further dampening demand for home ownership there.

With the rejection, the current dynamic continues. Prices for detached houses and owner-occupied apartments should continue to rise above average in the centers, while peripheral locations remain more volatile. For buyers in urban agglomerations, this means ongoing competition for a limited supply. For more rural regions, economic connectivity to the centers is more important than migration policy.

Construction sector and supply

A frequently overlooked aspect concerns the construction industry itself. A significant portion of skilled construction workers comes from the EU. Tougher immigration rules would have intensified the labor shortage in both building construction and civil engineering, further slowing the already sluggish housing construction. Supply would have become even tighter, which would have had a price-stabilizing effect but would have cemented the seller's market.

With the status quo, the supply of labor remains secure. Still, the industry does not expect a noticeable acceleration in housing construction, as land shortages, objections, and rising construction costs continue to slow the pace. Construction output is likely to remain behind population growth, further supporting price levels.

Consequences for the mortgage market

For the mortgage market, the message is clear: The most important long-term demand factor, population growth, remains active. The growth in mortgage volumes, which was recently around 3 percent per year, is likely to continue along a similar path. Banks, insurers, and pension funds can continue their growth strategies in the mortgage market without having to factor in an abrupt drop in demand.

On the interest rate side, however, the result does not provide any direct stimulus. The conditions for fixed-rate mortgages and SARON mortgages continue to depend primarily on the SNB's monetary policy and global capital market interest rates. For buyers, the central question thus remains the same as before the vote: How will mortgage interest rates develop, and is your own affordability sufficient for the property?

Classification

The referendum stabilizes expectations in the Swiss housing market. Buyers can assume that structural demand for housing will persist, but so will the well-known supply shortage. As a result, the micro-location of a property, its transport connections, and the cantonal tax situation become more important than the question of short-term price corrections.

Sources: SRF on the June 14, 2026 vote, UBS analysis of the real estate market via cash.ch.