The Swiss real estate market is booming, and home ownership is becoming unattainable for many. However, one institution is primarily to blame for this.
Miami, Tokyo, and Zurich were the cities with overheated real estate markets in 2024.
In 2025, Miami, Tokyo, and Zurich are still the places with the highest risk of a real estate bubble – but with one significant difference.
Discrepancy increases
This year, the risks for Miami and Tokyo dropped according to the real estate bubble index of the major bank UBS.
In Zurich, on the other hand, the value increased.
Market imbalances eased in Miami and Tokyo, according to reports from the US and Japan.
However, at critical points for the real estate markets, inflation-adjusted house prices rose by an average of around 25 percent over the past five years, while rents rose by only 10 percent, with incomes up by just 5 percent.
Metropolises with a low risk of a real estate bubble saw house prices rise by only 5 percent, while rents and incomes did not increase at all.
Price slumps in Hong Kong and Paris
Historically, increasing shortages in the real estate market and the widening gap between house prices and rents have always been warning signs of crises, warned the financial experts at UBS.
In Miami, real house prices have risen by a staggering 50 percent over the past five years. In Tokyo and Zurich, on the other hand, prices rose by 35 and 25 percent, respectively.
For comparison, UBS cited developments in Hong Kong and Paris over the same period, where prices fell by more than 20 percent.
Prices also fell by double digits in London and Munich.
Decades of work
One key figure illustrates how different the situation is in the individual real estate markets.
How many years does a skilled worker have to work to be able to buy the cheapest 60-square-meter apartment?
In Miami, this is possible after just five years.
In Tokyo and Zurich, however, skilled workers have to work for almost 12 and nine years, respectively.
Decades of rent payments
But there is another key figure that distinguishes hotspots for real estate bubbles.
The purchase price in relation to rent (price-to-rent multiples) shows how many years of rent must be paid continuously to recoup the purchase price.
Zurich tops the ranking with 43 years. Geneva is in third place with around 38 years, and Tokyo is in fifth place with 30 years.
In Miami, however, that figure is only around 15 years.
Prospective buyers in Miami, therefore, have much better prospects than those in the Swiss real estate market, because both wages and rents are rising faster, enabling them to jump onto the property ladder sooner.
Fueling demand
In their comprehensive report, UBS experts identify the Swiss National Bank (SNB) as the main culprit for fueling the Swiss real estate bubble, as it lowered its key interest rate to zero again at the beginning of 2025, thereby once more strongly fueling demand.
In Zurich, real house prices have risen by over 60 percent within a decade – twice as much as rents and five times more than incomes over the same period.
Risks brewing
UBS has criticized that the stability of the real estate market depends upon continued low financing costs and robust economic growth.
In the US, the central bank is keeping key interest rates high, and in Japan they are rising.
As long as Zurich remains a hotspot for technology companies and providers in the field of artificial intelligence (AI), the market is unlikely to collapse.
Switzerland’s low interest rate policy and the attractiveness of the Swiss franc are saving private individuals and companies a lot of interest, as muula.ch recently reported on the 33 billion Swiss francs in savings per year.
But this is leading to a gigantic bubble in the real estate market – until it bursts with a very loud bang.
October 25, 2025/kut./ena.
