The Swiss National Bank (SNB) recently decided to cut its key interest rate to 0.5%, marking a key step in the adjustment of its monetary policy. This 50 basis point cut reflects a response to domestic and international economic pressures, notably the overvaluation of the Swiss franc and the need to keep inflation under control.
But is this decision a real asset for all Swiss economic players? Let’s take a look at the associated strategies and impacts.
Cutting the key interest rate to 0.5%: An adjusted strategy
On December 12, 2024, the SNB lowered its key rate from 1% to 0.5%, continuing a trend begun earlier in the year (1.1% in August, 0.7% in November). This reflects proactive management in the face of falling energy and food prices, as well as a general weighting towards the prices of goods and services.
There are two main reasons for this decision:
- Support the competitiveness of exporting companies, penalized by a historically strong Swiss franc.
- Stabilize the Swiss economy, promoting growth and reducing the risk of inflation.
However, while this monetary policy supports businesses and borrowers, it has less favorable consequences for savers, whose returns will decline in the short term.
What impact is this expected to have on the real estate industry and the various players in the Swiss economy?
The cut in the key interest rate has a direct impact on the real estate sector, with several notable effects:
- Mortgages : Fixed 10-year mortgage rates, currently around 1.4% to 1.6%, could fall to historically low levels, making home ownership more attractive for households.
- Rents : The Swiss Federal Housing Office predicts a reduction in the rent reference rate in 2025, offering relief to tenants.
- Increased competitiveness : A weaker Swiss franc could boost foreign investors’ interest in Swiss real estate, while supporting local businesses.
These factors make the Swiss real estate market even more attractive to homeowners and investors alike, against a backdrop of historically low interest rates.
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Outlook for 2025: Stability and flexibility
The SNB, under the leadership of Martin Schlegel, has clearly announced its determination to maintain monetary stability while adapting to global economic developments. Some economists do not rule out a further reduction in the key rate to 0.25%, or even the introduction of negative rates if economic conditions so require.
For real estate players, these developments reinforce the importance of a proactive and flexible investment strategy.
In a nutshell
The SNB’s decision to reduce its key interest rate to 0.5% is designed to support the Swiss economy while addressing the challenges posed by the overvalued Swiss franc. While property owners and investors stand to gain, savers will have to turn to alternative solutions to optimize their returns.
With SIPA crowd immo, take advantage of investment solutions adapted to this new economic environment. Our projects give you access to diversified, secure real estate opportunities, whether you’re a novice or an expert.
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