How can you anticipate fluctuations in the real estate market?

The fluctuations of the real estate market never occur by chance. They are closely linked to several macroeconomic factors whose analysis makes it possible to understand the state of the market and anticipate its evolution. By mastering these indicators, professionals can identify upcoming trends and make safer investment decisions for 2026.

The real estate market does not react immediately to changes in the economic situation. Unlike financial markets, it follows economic cycles (expansion, slowdown, or recession) with a time lag. Construction decisions, supply adjustments, and purchasing behaviour take time to materialize.

This lag is an advantage for professionals: by closely observing the first economic signals (such as credit market statistics, mortgage demand, or migration trends), it becomes possible to anticipate upcoming effects on the real estate market. For example, when banks observe a continuous decline in mortgage applications over several months, this generally indicates a future drop in buying demand. This signal appears long before prices or selling times begin to ease.

Interest rates are one of the most decisive indicators for anticipating real estate market fluctuations. They simultaneously influence financing costs, buying demand, property values, and the attractiveness of real estate compared to other asset classes.

• Low interest rates stimulate real estate investment: they reduce mortgage costs, increase borrowing capacity, and support demand.
• They also encourage price increases: easier access to credit intensifies competition among buyers, increasing demand, which can push sellers to raise sale and rental prices.
• Favourable refinancing conditions improve the profitability of existing properties, encouraging investors to maintain or expand their portfolios.

To correctly anticipate market movements, investors can monitor these dynamics and adjust their strategies according to interest rate conditions and expected returns.

Inflation corresponds to the general increase in the price of goods and services over a given period. It reduces the purchasing power of money, directly influencing investment decisions and the dynamics of the real estate market. Real estate is often perceived as a protection against inflation: when the value of money decreases, real estate assets tend to maintain or increase their value over time. Moreover, during inflationary periods, it becomes advantageous to go into debt: a loan taken out today is repaid tomorrow with devalued money, reducing the real burden of debt and reinforcing the appeal of real estate investment. Risks and effects of inflation on the real estate market:

• Rising construction costs: materials and labour become more expensive, which increases the cost of new projects and may slow down construction.
• Potential increases in interest rates: to control inflation (by reducing money supply), the SNB may raise its key rates, which can slow down mortgage lending.
• Pressure on household purchasing power: if wages do not follow inflation, the capacity to buy or rent housing declines, which may reduce demand or shift it to other market segments (e.g., single-person households).

By closely monitoring SNB and FSO publications, professionals can identify upcoming inflationary tensions. In Switzerland, inflation is generally more stable than in other countries, but external factors, such as rising raw material prices, geopolitical shocks, or health restrictions can influence inflation levels.

GDP growth directly influences the evolution of the real estate market. When the economy grows, household disposable income increases, strengthening their purchasing power and stimulating housing demand. A favourable economic context therefore creates an environment conducive to transactions and property value appreciation. A dynamic labour market is a key foundation for stability and growth in the real estate sector. It is useful to analyse not only overall employment figures, but also the quality of jobs created and income distribution, which determine real demand dynamics.

• an increase in employment generates additional housing demand,
• rising salaries allow households to support higher rents and purchase prices,
• growing incomes also support investment in commercial real estate.

Economic performance is reflected immediately in commercial real estate:

• expanding companies require more office and warehouse space,
• the creation of new businesses increases the demand for commercial surfaces,
• a dynamic retail sector strengthens the need for commercial spaces.

Currently: In Switzerland, GDP increased by around 1.5% between 2024 and 2025, continuing a linear and steady growth trend. This development suggests favourable economic prospects for 2026.

Demography is one of the most reliable indicators for anticipating future demand.

• Population growth mechanically increases the need for housing.
• Urbanisation continues to concentrate demand in city centres and major metropolitan areas, supporting property values in urban locations.
• Changes in lifestyle (remote work, more flexible mobility, growth of single-person households) influence the types of properties sought.
• Growing demand for age-friendly housing (accessible, secure, close to services).

For real estate professionals, integrating these trends helps adjust supply, identify promising markets, and develop products tailored to the real needs of the population.

The vacancy rate is a key indicator used to measure the balance between supply and demand. In Switzerland, it has been decreasing continuously for several years: as of 1 June, 3519 fewer vacant dwellings were recorded, a decline of 6.8% and the fifth consecutive decrease. With a national rate close to 1%, the market remains very tight.

For 2026, this trend suggests even fewer available dwellings, confirming sustained demand across most regions, both in the rental and ownership markets.

Mortgage rates remain generally low, although fixed rates are higher than variable ones due to lower risk for banks. This low-rate environment continues to encourage borrowing and supports demand for home ownership, particularly among:

• households with available capital,
• families,
• older buyers seeking financial stability.

A low interest rate environment therefore helps maintain active demand, even when the broader economic outlook appears more cautious.

The Swiss Residential Property Price Index (IMPI) for the 3rd quarter of 2025 rose by 0.8% compared with the previous quarter, reaching 124.3 points (base 2019 = 100). Year-on-year, residential property prices increased by 5.2%. This trend confirms a persistently rising market, supported by limited supply and strong demand.

The sresi® 2025 shows a marked recovery in confidence within the sector. Over two years, the index rose from a low of –77.4 points to a record +69.5 points. Despite a cautious reading of macroeconomic conditions, professionals expect positive prospects, particularly in the residential and logistics segments.

The UBS Swiss Real Estate Bubble Index measures overheating risk by evaluating the gap between property prices and their fundamentals (income, rents, mortgage debt, buy-vs-rent costs, price dynamics). Between the 2nd and 3rd quarters of 2025, the index rose from 0.20 to 0.29, indicating a slight increase in risk but not an alert situation. Some regions remain more exposed:

• tourist areas in the Grisons,
• the Lake Geneva region,
• Yverdon-les-Bains.

• Monitor mortgage rates and SNB policy: for example, rising interest rates reduce buying demand, lengthen selling times, and put downward pressure on prices. If inflation rises, interest rates will also rise (regulated by the SNB). High inflation can increase construction costs and slow down new projects.
• Observe key real estate indicators such as the vacancy rate and price trends.
• Stay informed about demographic trends (immigration, population ageing, etc.) to anticipate demand shifts.
• Consult FSO analyses: one indicator alone is never sufficient.

The real estate market can be anticipated by monitoring key indicators such as interest rates, inflation, economic conditions, demographic trends, and specialised real estate indices. By combining these elements, professionals gain a reliable understanding of future tensions between supply, demand, and prices, enabling them to adjust their investment strategies with precision.

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