UBS Real Estate Focus 2026: Home Ownership in Only 17% of Municipalities

Over four fifths of municipalities too expensive

Anyone looking to buy a 100-square-metre condominium in Switzerland today needs more than ever before, both in equity and in income. The UBS Real Estate Focus 2026, the big bank's annual assessment of the Swiss property market, reaches a sobering conclusion: a typical condominium of this size is affordable for a household on median income in only 17 percent of all Swiss municipalities.

That means: in around 83 percent of municipalities, the financing costs for a typical condominium exceed what a household on a normal income can raise under the banks' affordability rules.

Affordability calculation as the decisive hurdle

The central bottleneck is not equity alone, but affordability. Swiss banks require that total annual housing costs, consisting of the imputed interest rate (5 percent), amortization and maintenance, make up no more than one third of gross income. At a purchase price of CHF 900,000, which is by no means excessive in agglomerations like Zurich, Basel or Zug, these costs quickly add up to more than CHF 50,000 per year in the imputed model. That corresponds to an income requirement of around CHF 150,000 gross per year, plus the 20 percent equity.

Ten years ago the hurdle was lower. The combination of higher property prices together with rates that have only recently come down again but still sit above the all-time low has markedly worsened affordability.

Where home ownership remains affordable

The situation is intact in some rural regions. According to the study, more affordable areas are found along the Jura, in large parts of Valais, and in northern Ticino. In German-speaking Switzerland, regions such as Thurgau, Appenzell and Schaffhausen still count as comparatively accessible for prospective buyers with a mid-range household income.

What these regions share is a lower price level which, combined with the imputed interest rate, still keeps affordability within a realistic range. Whether these locations will also hold their value in the long term is another question, and demographic developments play an important role here.

Running costs still lower than rent

An interesting finding of the UBS study: despite the high entry barriers, the running costs of home ownership are on average almost a quarter lower than the rent on a comparable apartment. Anyone who has made it into their own home and mastered the financing hurdle therefore benefits permanently from lower housing costs, without the monthly rent payment and with long-term wealth accumulation.

Price rise continues in 2026

Despite economic uncertainties, UBS is also forecasting rising prices in 2026. Condominiums are expected to become around 3.5 percent more expensive over the course of the year, and single-family homes 2.5 percent. For rental apartments, asking rents are projected to gain around 2 percent. Supply remains tight: some 2,000 new rental apartments are expected in 2026, which hardly registers against demand.

The persistent scarcity is structural: building zones close to cities are largely exhausted, permit procedures are lengthy, and renovation projects frequently flow into the upmarket segment rather than into more affordable housing.