Dossier on the mortgage market

The volume of mortgages in Switzerland is significant and has increased considerably over the years. This raises the risk of an overheating of the real estate market. FINMA works to ensure that mortgage lending is sustainable and that the solvency of banks is not put at risk. This page provides key information on this topic.
From the Annual Report 2022

Significant risks in the real estate and mortgage market: supervisory activities focus on lending criteria and highly exposed institutions

JB 2022

In the wake of tightening monetary policy, interest rates on mortgage loans also rose significantly during the course of the year. Unperturbed by this, the price trend in the real estate market, which had been increasing since 2020, continued even in 2022.

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From the Risk monitor 2022

Credit risk: mortgages

Hypotheken

The credit risk associated with mortgage loans has grown in importance in recent years, as on the one hand affordability risks for newly granted mortgages increased and, on the other, fundamentals point towards an overheating of the real estate market.

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From the Annual Report 2021

Trends in the real estate market 2021

The substantial risks in the mortgage and real estate markets were further accentuated as a result of the price increases during 2021. The strong demand seen in the tenant market – also during the coronavirus pandemic – at least helped to ward off further increases in the risks faced by the residential investment property sub-market.

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From the Risk monitor 2021

Correction in the real estate and mortgage market 2021

The real estate market has proved resilient in the face of the coronavirus pandemic, not least thanks to government support packages and monetary policy interventions. Indeed, mortgage volumes have actually increased further. 

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From the Annual Report 2020

Trends in the real estate market 2020

The risks that had built up in the real estate market as a result of the developments in recent years were amplified due to the impacts of the coronavirus crisis. Occupier and investor markets continued to diverge, particularly in the area of residential investment property financing.

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From the Risk monitor 2020

Correction on real estate and mortgage market 2020

Vacancy rates for residential investment properties, which have risen further owing to the corona pandemic, increase the level of risk in the Swiss real estate and mortgage market. Lost earnings from the rental of commercial and office property and flagging demand for office and retail space are pushing down prices in the commercial real estate segment. Moreover, growth in mortgages was more robust than expected this year

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From the Annual Report 2019

Mortgage market in supervision 2019

FINMA has repeatedly emphasised the growth of mortgage market risks in recent years. The reporting year was no different as FINMA drew attention to the ongoing growth of these risks, for example at the annual media conference of 4 April 2019, where the results of the 2018 extended mortgage stress test covering 18 banks were disclosed, and in its December Risk Monitor. The latter report highlighted investment properties, which merit a closer supervisory focus as they are particularly exposed, not least due to unprecedented vacancy levels.

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From the Risk monitor 2019

Risks of correction on real estate and mortgage market

The sharp rise in vacancy rates for investment properties, combined with the ongoing boom in construction activity, is exacerbating the risks in the Swiss real estate and mortgage market. Previous crises have shown that financial institutions which expand their activity in the late phase of an economic cycle are particularly exposed to the risks of an ensuing economic downturn.

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From the Annual Report 2018

Mortgage market measures

Uninterrupted mortgage market growht

The strong vacancy growth in residential investment properties and the sustained high level of construction have increased Swiss real estate market risks. Previous crises have shown that those institutions assuming risk at a late stage in the cycle are the most exposed to an economic downturn.

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From the Annual Report 2017

Imbalances in investment properties

Dossier Hypothekarmarkt

Persistently low interest rates also mean that investors still face a dearth of supposedly low-risk return opportunities, and investing in real estate therefore remains attractive.

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From the Annual Report 2016

Mortgage market slightly calmer

Momentum in the Swiss mortgage market eased slightly in 2016, especially where owner-occupied residential properties were concerned.

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From the Annual Report 2014

Interest rate risks and mortgage growth

In the low interest rate environment, monitoring and managing interest rate risks remains extremely important.

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From the Annual Report 2014

Real estate price growth slows slightly after package of measures in 2014

Hypothekaranforderungen

Price growth slowed slightly following the increase in the countercyclical buffer and the somewhat stricter rules on amortisation and central parameters of self-regulation. However, imbalances and the factors driving them persist.

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From the Annual Report 2013

Real estate market remains tight

Swiss real estate prices and mortgage volumes: annual inflation-adjusted growth rates

Despite self-regulatory measures and the countercyclical capital buffer, real estate prices and mortgage volumes once again rose in 2013 – somewhat more slowly than before, but still faster than gross domestic product. Excessively slow amortisation and, in some cases, poor financial sustainability of mortgages and investment properties are giving rise to risks.

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