Swiss housing market shows luxury surplus in Zurich and rising appeal of mid-sized cities

A study by UBS highlights a growing divide in the Swiss housing market, noting that medium-sized cities are becoming more attractive to families than major hubs like Zurich and Geneva. For a hypothetical family with two children and an annual income of 150,000 CHF, medium-sized cities offer significant advantages due to lower living costs, despite the high-quality infrastructure and amenities found in larger centers.

In Zurich, specifically in the Witikon district, a surplus of luxury housing has been observed. In the Oeschbrig development, more than 50% of the 69 luxury apartments remain vacant. High land prices and real estate valuation practices drive developers to focus almost exclusively on the high-end segment, as the cost of land accounts for 45% to 70% of total costs. This focus on high-yield luxury units leaves a shortage of affordable housing, even as demand for lower-priced segments remains high.