The property professionals’ solution

Combining economic stability, legal security and patrimonial value, Swiss real estate ranks among the markets most sought after by international investors. But who are these actors who buy in Switzerland, and what effects does their presence produce on local players?

What are the motivations of foreign investors?

In 2025, 93% of real estate investors consider Switzerland an attractive market. This interest rests on several structural factors:

• Political stability and legal security: the Swiss institutional framework guarantees predictability of rules and protection of property rights.
• Economic resilience: Switzerland has maintained steady growth and low unemployment, including during the 2008 financial crisis. This continuity strengthens the perception of a stable real estate market.
• Safe-haven position: Swiss real estate offers a moderate but constant return, with a structurally low level of risk. This stability gives Switzerland an international reputation as a safe market.
• Quality of infrastructure and human capital: the country has an efficient logistics network and a highly qualified workforce, despite high labor costs.

What is the share of foreign investors?

Foreign investors represent around 11% of real estate holdings in Switzerland. Before 2011, their share reached nearly 15%, but it has declined over the past decade. This decrease is partly explained by global macroeconomic conditions and by successive financial and geopolitical crises that have slowed some international investment flows.

Global macroeconomic context

Since the Covid-19 pandemic and the war in Ukraine, inflation has driven investors to turn towards real estate to protect their capital from the depreciation of their wealth.

The Swiss franc, although strong, is an ambivalent factor. On one hand, it increases the cost of acquisition for foreign investors whose currency has weakened against the franc. On the other, it raises the real profitability of investments made in Switzerland, thanks to its stability and long-term appreciation potential.

Thus, despite a strong franc and an uncertain global environment, Switzerland remains attractive for foreign direct investors, ranking 11th among 25 of the most sought-after countries for international real estate investment.

Why do investors choose real estate?

85% of investors believe that the attractiveness of real estate compared to other asset classes will continue to grow this year. This result reflects a consensus on the outlook for the real estate market and highlights the collective confidence of investors in the stability and potential of this asset class.

In what types of properties do foreign investors place their capital?

Residential properties remain the main target of foreign investors. More than half of them concentrate their investments on this segment. The most sought-after cities are Basel, Bern, Geneva, Lausanne, Lugano, Lucerne, St. Gallen, Zug, and Zurich.


Behind residential, logistics assets show notable growth, becoming the second most popular category. This trend reflects the rise of e-commerce and the growing demand for modern, well-located warehouses.


Hotels record a slight increase in interest but do not yet represent a significant share of portfolios. Conversely, office buildings attract only a minority of investors, due to uncertainty linked to hybrid work models and vacancy in certain urban centers.


Finally, several investors now favor peri-urban and rural areas, where regulations are less restrictive. In large cities like Geneva or Basel, strict authorization procedures, noise standards and climate targets slow densification and limit new real estate projects.

Who are the foreign investors?

Foreign investors in Switzerland come mainly from France, Germany and the United Kingdom. Their presence is explained by geographical proximity, the stability of the Swiss market and the search for safe assets in Central Europe. Israeli investors have a long tradition of investment in the commercial segment, which continues to this day. By contrast, Asian capital plays a marginal role, except in the hotel sector, where some actors have positioned themselves in recent years, particularly in prestigious tourist destinations.

Dualism between Swiss and foreign investors

Foreign investors are distinguished by a higher tolerance for risk than their Swiss counterparts. While the hotel industry represents only about 5% of investments made by Swiss investors, it reaches 21% among foreign investors. This difference reflects a more opportunistic approach, focused on higher-yield but also riskier assets.

Thus, the two investor profiles appear complementary: Swiss actors favor conservative management, while foreign funds bring a dynamic of diversification and risk-taking. Foreign investors play a stabilizing role: they take risks that Swiss actors hesitate to take, especially in periods of economic uncertainty, and thus contribute to maintaining market liquidity.

Effects on local actors

Foreign funds contribute to an increasing financialization of the real estate market: housing becomes more a speculative asset than a good of use. This evolution leads to rising prices and a scarcity of affordable supply, particularly in large cities.


In certain Alpine municipalities, secondary residences owned by foreigners represent more than 60% of the housing stock. This concentration modifies the local social and economic balance, with the risk of symbolic tensions linked to a feeling of territorial appropriation by non-residents.

Effects on local actors: Swiss investors and developers

Foreign investors increase competition in the Swiss market. Local developers and investors must compete with funds that have greater financial capacity, making it more difficult to acquire land or high-yield properties.


At the same time, this foreign presence creates opportunities for collaboration. Many international investors seek to partner with Swiss counterparts to better understand national regulations and administrative procedures. These alliances benefit developers, but also banks, law firms and fund managers, who profit from increased activity.


Finally, foreign investments in construction generate local economic spillovers: they mobilize Swiss labor, national companies and regional service providers, thus supporting employment and the dynamism of the building sector.

Regulation and circumvention

The Swiss legal framework aims to prevent the national territory from passing massively into foreign hands. However, not all foreign buyers are subject to the same rules: the acquisition conditions depend on their nationality and residence status in Switzerland.


The main regulation in force is the LFAIE (Federal Law on the Acquisition of Real Estate by Persons Abroad), better known as the Lex Koller. This law aims to protect the Swiss real estate market from excessive pressure of foreign demand, particularly in tourist areas and regions with high land tension.

Main restrictions for non-residents:

• Limited use: purchase is authorized only for a secondary residence for personal use, located in a recognized tourist area.
  
• National quotas: around 1,500 purchase authorizations are issued each year, then distributed among the cantons.
  
• Maximum surface area: the property may not exceed 240 m² of living space and 1,500 m² of land (sometimes 1,000 m² in some cantons, such as Vaud).
  
• Only one property per tax household is allowed.
  
• Prohibition of resale before five years, except under exceptional circumstances.

Case of property for professional use

Properties intended for commercial, industrial or artisanal activity are not subject to authorization, regardless of the nationality of the buyer. Only buildings used for the construction or rental of housing remain under the control of the Lex Koller.

Positive consequences of regulation

The Swiss real estate market stands out for its strict regulation, structural stability and low level of speculation. The limitations imposed by the LFAIE (Lex Koller) restrict the supply of available properties. This scarcity contributes to a lasting appreciation of assets and strengthens the status of Swiss real estate as a safe haven.

Combined with the strength of the Swiss franc, political security, high quality of life and the country's international neutrality, this regulation gives Switzerland a unique position in Europe: that of a safe and predictable market, capable of attracting international capital while preserving national stability.

Targeted areas: urban poles and tourist resorts

1. Urban markets:
Economic centers concentrate a portion of foreign investments. These cities offer yield stability, strong rental demand and high-level infrastructure, making them preferred markets for long-term investments.

2. Tourist markets: The Alpine regions constitute the other major pole of attraction for foreign investors, particularly in the segment of high-end secondary residences.

Critical point of view

The rise of foreign investments is gradually transforming housing into a globalized investment instrument, often detached from local needs. This evolution reflects a structural change: the shift from an ownership economy to an asset management economy, where the value of real estate is measured primarily by its financial profitability rather than its social use.


When investors do not reside on site, architectural, rental and economic decisions respond mainly to a financial logic, without taking into account local dynamics or residents’ needs.


This financialization of housing also contributes to increasing wealth inequalities: Swiss households suffer from rising prices without being able to keep up with the returns generated by international capital, thus accentuating the divide between institutional owners and local residents.

Conclusion

Swiss real estate remains an attractive and secure market, supported by strict regulation and rare economic stability. While foreign capital contributes to the liquidity and diversification of the sector, it also accentuates the financialization of housing and the pressure on local inhabitants.

Sources

ey.com - Article
ch.ch - Article
barnes-suisse.ch - Article
allnews,ch - Article
tgd.ch - Article
engelvoekers.com - Article
swissinfo.ch - Article
rts.ch - Article
chantiermagazine.ch - Article