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Rents and Real Estate: How 0% Interest Rates Are Changing the Game in Switzerland

Posted on by Mélodie Goy

Interest rate cuts: what impact on rents and the Swiss real estate market?

Baisse des taux d'intérêts

Since March 2024, the Swiss National Bank (SNB) has initiated a series of cuts to its key interest rate amid an economic slowdown and subdued inflation. On June 20, 2025, it took another step by lowering the rate to 0% [1].

This historic decision aims to support the national economy and boost lending. But what are the practical consequences for households, businesses, and especially for people on the move, who often face the reality of the Swiss rental market as soon as they arrive? Let’s take a closer look.

Lower rates, a still tight property market

By gradually lowering its key interest rate, the SNB has caused mortgage rates to fall, particularly variable-rate mortgages (SARON) [2]. The result: renewed interest in buying real estate, leading to a continuous rise in prices. In 2024, condominium prices rose by 4.2%, while single-family homes rose by 3.4% on average [3].

However, home ownership remains difficult, especially in urban centers and regions popular with international talent (Zurich, Geneva, Lausanne, etc.). The reasons for this are consistently high prices, limited supply, and strict financial requirements [4]. For expatriates or mobile employees, who are often on fixed-term contracts, home ownership remains a marginal option.

At Welcome Service, we have found that more than 90% of the people we assist opt to rent due to these barriers to entry. Our role is to make this transition easier by facilitating access to housing upon arrival in Switzerland, thanks to our local knowledge and network of partners.

The rental market: between downward adjustments and strong pressure

The most visible effect of lower interest rates for tenants is the reference interest rate used to regulate rents. This rate was lowered in 2024, paving the way for requests for rent reductions, particularly for existing leases [5]. This trend could slightly mitigate rent increases in the coming months [6].

But in reality, demand for housing remains higher than supply, especially in large cities. The housing shortage – exacerbated by low construction activity and sustained population growth – continues to put upward pressure on rents [7].

This is particularly felt by new arrivals, who have to find accommodation at short notice, often without a track record, and sometimes without a complete file upon arrival.

This is where Welcome Service’s expertise comes in: thanks to our relocation and personalized housing search services, we enable new arrivals to overcome the obstacles of the Swiss market. We intervene before they take up their new position to anticipate tensions in the local market, advise on neighborhoods, and assist with the preparation of rental applications – a determining factor in securing a property.

Lower rates: an opportunity for international companies?

For employers, this development can have a twofold impact:

Making Switzerland more attractive to foreign talent, thanks to a slight rebalancing of the rental market and more favorable financing conditions.

Optimizing the relocation of employees by taking advantage of a slightly less tense environment than in 2022–2023, particularly for family homes and mid-range properties.

However, it is important not to underestimate regional disparities. In Zurich and Lausanne, the market remains extremely tense. In Neuchâtel and certain towns in Valais, there is more room for negotiation. This heterogeneity requires a personalized and local approach, which has been at the heart of Welcome Service’s DNA for over 35 years.

What are the medium-term prospects?

In the short term, experts agree that pressure on rents will not disappear, even if interest rate cuts help to limit its extent [6]. In the medium term, development policies, construction capacity, and changes in reference rates will be decisive factors.

At the same time, employers and expatriates will need visibility and flexibility. Choosing the right canton, understanding local regulations, and anticipating deadlines are all factors that influence the success of a relocation.

At Welcome Service, we closely monitor market developments and adapt our support services accordingly. Whether for a single executive, a large family, or a team relocation, our goal remains the same: to ensure a smooth landing in a changing real estate market.

In summary:

◉ Lower interest rates – now set at 0% – ease the pressure on financing, but do not solve the housing shortage.
◉ Rents could slow down… but remain subject to strong pressure in major centers.
◉ Relocation assistance remains a key lever for securing talent mobility.

Want to find out more about our relocation, temporary accommodation, and administrative support services?

Discover our approach at welcome-service.ch

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