Raiffeisen Study Q2 2026: Construction Regulation as a Structural Driver of Prices

The Core Finding: Regulation Is Growing Faster Than Housing Construction

The current real estate study by Raiffeisen Switzerland for the second quarter of 2026 highlights a connection that is becoming increasingly noticeable in the Swiss home ownership market: Despite historically low vacancy rates and clear signs of scarcity, housing production is not being expanded. For the first time, the study provides robust data on a structural cause—namely, the steadily growing construction regulation.

Specifically, according to Raiffeisen, cantonal building laws have grown by an average of 26 percent since 2005, with associated building ordinances rising by as much as 32 percent. The number of unique regulatory terms in cantonal legal texts increased by 10 to 15 percent in the same period. The picture becomes even clearer when you take into account the expansion into other legal fields and private technical standards, which are now also binding for developers.

Why Supply Doesn’t Respond

Developers do not respond to regulatory density with speed, but rather with caution. Higher complexity means longer planning phases, more specialized expertise, more demanding approval procedures, and a greater risk of process disruption due to appeals and late requirements. Fredy Hasenmaile, Chief Economist of Raiffeisen Switzerland, notes in the study that the multitude of new societal expectations is driving complexity, risks, and the costs of housing construction so sharply upward that the necessary expansion in building activity is not taking place.

This is economically significant. In a functioning market, supply responds to rising prices with additional construction. In Switzerland, this mechanism has shifted: Construction activity is not keeping pace with demand because the regulatory environment is structurally delaying the supply reaction.

Current Market Dynamics: Calm Before the Next Wave

Following the strong price increase in the rental and purchase markets, the dynamics have noticeably calmed since early 2024. Declining immigration and lower interest rates have temporarily eased demand pressure. Even for more expensive properties, a certain price sensitivity is now evident, especially in the rental segment.

However, Raiffeisen cautions against declaring an early all-clear. The dampening effect of lower reference interest rates on rents is coming to an end, while construction costs are under pressure due to rising energy prices, among other things as a result of the Iran conflict. The historical relationship between vacancy and price level suggests that the current calm is only a transition phase. The study assumes that rent price dynamics will pick up again later in the year.

Implications for Buyers and Mortgage Holders

For buyers in the current market environment, several consequences arise from the interplay of regulation, limited supply, and stabilized interest rates:

• The supply shortage acts as a stabilizing force against price drops. Those waiting for a clear price drop in the home ownership segment are betting against structural factors. The density of regulation is slowing the only mechanism that could permanently relieve prices, namely additional building activity.
• New construction projects are becoming riskier. Those reserving a not-yet-completed apartment should factor longer approval timelines into their financing plans. Delays of six to eighteen months are now no longer the exception in municipalities with high regulatory intensity.
• Existing properties are gaining relative attractiveness. As the effort involved in a replacement development increases, existing building stock maintains a structural value. For buyers, this means older properties in good locations tend to have higher lendability.
• Affordability remains the central benchmark. Even with stable market interest rates, banks are still calculating with notional rates of around 4.5 to 5 percent. The structural price support on the supply side does not change this.

The Special Case: Imputed Rental Value

The study also touches on the issue concerning the abolition of imputed rental value, adopted in 2025. Eight months after the reform decision, there have not yet been any visible reactions in the data series on renovation permits and construction activity. The full impact will only be felt with the 2029 tax year. Thus, owners have ample time to coordinate the effects on amortization strategy and renovation planning with their tax advisor.

Context

The new data confirms what market observers have been describing for years: The Swiss home ownership market is not a classic equilibrium market. The regulatory expansion documented by Raiffeisen explains a significant part of this structural immobility. For financing practice, this means that the price stability of recent years is neither coincidental nor simply a result of interest rate effects, but rather the result of chronic supply shortages that cannot be politically resolved in the short term.

Those seeking financing today should not ignore this structure. The realistic expectation is not a major price decline, but rather a tendency for price levels to continue at their current level with periodic upward phases, as soon as demand and interest rates are once again moving in the same direction. This is the key framework for choosing maturity, amortization, and loan-to-value. Anyone wishing to study the report in more detail can find it directly at Raiffeisen.