SNB key rate cut: what impact for the real estate market?
10.04.2025
On March 20, 2025, the Swiss National Bank (SNB) lowered its key interest rate once again, to 0.25%. This was the fifth consecutive cut since March 2024, against a backdrop of slowing inflation and an uncertain economic outlook.
This decision is part of an increasingly accommodating monetary policy aimed at stimulating economic activity without triggering an inflationary spiral.
That said, this fall does not automatically guarantee a general easing of mortgage rates, as other factors - notably long-term rate expectations in the eurozone - come into play. The current situation, marked by geopolitical uncertainty and heterogeneous fiscal policies, complicates the reading of the market.
Commercial investment properties, on the other hand, continue to come under greater pressure. Tighter lending rules, combined with increased selectivity on the part of investors, are accentuating the importance of location and property quality.
Sources
rts.ch - Article
swisslife.ch - Article
wuestpartner.com - Article
This decision is part of an increasingly accommodating monetary policy aimed at stimulating economic activity without triggering an inflationary spiral.
Contrasting effects on the real estate market
On paper, a lower key interest rate favors access to credit, which can stimulate demand in the residential real estate market. Indeed, SARON mortgages benefit directly from this fall, and are once again more attractive than fixed rates, which have become slightly more expensive in the medium term.That said, this fall does not automatically guarantee a general easing of mortgage rates, as other factors - notably long-term rate expectations in the eurozone - come into play. The current situation, marked by geopolitical uncertainty and heterogeneous fiscal policies, complicates the reading of the market.
Sustained demand despite uncertainties
Despite a fragile economic environment, the Swiss real estate market remains buoyant, particularly for owner-occupied homes. Data for 2024 show a rise in prices, particularly for owner-occupied apartments (+4.2%) and detached houses (+3.4%). Falling interest rates could prolong this dynamic in 2025, especially in the absence of an expansion in supply.Commercial investment properties, on the other hand, continue to come under greater pressure. Tighter lending rules, combined with increased selectivity on the part of investors, are accentuating the importance of location and property quality.
Towards a new downturn?
If the current trend continues, the key interest rate is likely to stabilize at its current level in the months ahead. The SNB has indicated that it remains attentive to the risks of deflation and to developments in the ECB's monetary policy. A further rate cut cannot be totally ruled out, but it will depend on a number of factors, not least external ones.Sources
rts.ch - Article
swisslife.ch - Article
wuestpartner.com - Article