This pullback primarily reflects classic seasonal cyclicality – Q4 structurally benefits from year-end closings and bank target fulfilment – but was amplified by pronounced wait-and-see behaviour among investment property investors. On a year-on-year basis, the number of transactions remained virtually flat (+0.4%), underscoring the market's underlying resilience.

More importantly, this quarter marks a structural turning point: the market is now pricing in a durable repricing of risk, with long-term rates firmly anchored above 1%. The end of the low-rate regime is now a reality.

Residential mortgages: the unshakeable safe haven

The owner-occupied residential segment once again confirmed its remarkable strength. With 13,534 transactions and a volume of CHF 9.91 billion, it captured 62% of market share and grew by +7.34% in CHF volume year-on-year. The inelasticity of fundamental housing demand among Swiss households far outweighs global macroeconomic uncertainty.

Residential borrowers, structurally risk-averse, continue to favour fixed rates to ensure payment predictability. The SNB's policy rate at 0.00% and a median SARON of 0.95% maintain attractive financing conditions. However, the massive gap between the best negotiated offer and the least competitive – 105 bps, or up to CHF 9,450 per year on a CHF 900,000 loan – is a stark reminder of the critical importance of systematically comparing lenders.

Investment properties: defensive posture and volume retreat

The contrast with residential is striking. The investment property segment totalled CHF 8.60 billion (8,134 transactions), contracting by -24.8% QoQ and -9.3% YoY. This decline does not reflect a tightening of lending standards – LTV requirements remain stable – but rather a deliberate wait-and-see stance from professional investors. In a period of heightened geopolitical tensions, liquidity takes priority: investors prefer to keep their capital available rather than locking it into real assets.

At the same time, the lender landscape is undergoing a profound transformation. Insurance companies are progressively withdrawing, no longer hesitating to offboard clients at renewal or impose deliberately unfavourable terms to trigger natural exits. Conversely, pension funds are making a targeted return through a cherry-picking strategy on residential investment properties, applying capitalisation rates 12% to 20% below those of banks in high-potential economic zones, thereby maximising the income value of financed properties.

Rates and margins: the cost of certainty is rising

The median 10-year fixed rate rose by 11 bps to 1.68%, driven by rising international bond yields and a growing geopolitical term premium. The median SARON remained stable at 0.95%, confirming the SNB's monetary anchor.

The 73 bps spread between SARON and the 10-year fixed rate remains the key arbitrage driver: for a reference loan of CHF 900,000, choosing SARON generates annual savings of CHF 6,570. Investors are shifting massively towards SARON to offset the rise in long-term rates and maximise immediate cash flow, while residential borrowers remain predominantly on fixed rates.

On bank margins, the Basel III environment structurally locks in profitability floors. The margin on the 10-year fixed rate widened to 1.05% (vs. 0.98% in Q4). The standout feature of the quarter remains the extreme heterogeneity of pricing policies: the gap between the best offer (1.25%) and the least competitive (2.30%) reached 105 bps – a record level.

Focus: Basel III and the end of the "standalone mortgage"

The definitive implementation of Basel III is redrawing the rules of credit access. Banks now require a full banking relationship – salary domiciliation, transfer of assets under management – and penalise purely transactional profiles. The mortgage without any other banking relationship (the "standalone mortgage") is gradually disappearing. Credit exceptions are becoming rare, reserved exclusively for profiles with strong wealth development potential.

This paradigm shift hits offshore clients particularly hard. Unable to offer sufficient relationship development, they face closed doors from the majority of cantonal and systemic institutions when seeking to acquire or refinance investment property in Switzerland.

Outlook: the market enters a new regime

For the remainder of 2026, the SNB is expected to maintain its policy rate at 0.00%, with SARON anchored around 0.95%. Fixed rates, however, are expected to continue drifting upward, with an estimated increase of +0.20% by year-end, driven by the repricing of international bond markets.

Two exogenous factors deserve particular attention. First, the geopolitical escalation in the Middle East is generating a logistics shock on construction materials (+8% to +12%), which, combined with the prospect of the abolition of imputed rental value taxation in 2029, is expected to widen the energy discount (Brown Discount) on properties requiring renovation – from 15% currently to potentially 25-30% post-2029. Second, the overlap of the imputed rental value abolition and the introduction of individual taxation will reshape the fiscal equation of property ownership, particularly penalising married couples with asymmetric incomes who have purchased recently.

In this fragmented and ultra-selective market, information asymmetry has never been greater. Simply comparing rates is no longer enough: structuring your application in advance to meet the specific requirements of each lender type has become essential.