Property Market Switzerland 2024 | 2

The Swiss economy has lost some of its momentum recently. Real GDP growth is currently below the average of the last 10 years, a situation that is hardly likely to change in 2024 (forecast: +1.1%). Weak demand from abroad – due to the stagnation of the German economy, among other things – and the strong Swiss franc are putting the manufacturing sector under pressure.

On the other hand, the Swiss labour market is robust and employment continues to grow, albeit not quite as strongly as before: year-on-year job growth amounted to 1.7% in the fourth quarter of 2023, and was as high as 2% in the services sector. The job vacancy rate remains in the region of 2%.

Inflation has come down more quickly than expected and stood at just 1.2% in February 2024. Combined with significantly lower inflationary expectations, this enabled the SNB to respond in March 2024 by initiating the first key interest rate cut since 2015. Although inflation did then rise once again to 1.4% in April, it remains well within the SNB’s target bandwidth.

The lowering of key interest rates is likely to provide real estate markets with renewed stimulus – particularly as the current environment makes it likely that there will be at least one further rate cut before the year is out.