Is Zurich’s real estate market still undervalued? A data-driven look at what’s next

Zurich has long been regarded as one of the most secure, high-quality real estate markets in the world. With its signature blend of economic stability, political neutrality, and exceptionally high quality of life, it has quietly attracted capital from every corner of the globe. But with residential prices up more than 60% over the past decade and office yields hovering near historic lows, many are beginning to ask:

Has Zurich reached its ceiling, or is there still room to grow?

At PhoenixRevoco, we’ve spent years watching and working inside this market.

And we believe that while Zurich isn’t “cheap” — it may still be undervalued, particularly when viewed through the lens of long-term structural demand, scarcity of supply, and global investor behavior.

Let’s unpack the full picture.

A Safe-Haven with Real Muscle

Unlike many cities whose real estate markets are driven by speculation or leverage, Zurich is underpinned by substance — not sizzle. Capital continues to flow into Switzerland for good reason. The Swiss Franc remains one of the world’s most stable currencies. The legal system is transparent and predictable. Mortgage underwriting remains conservative, even in an era where other jurisdictions have eased standards. And despite the inflationary shocks of the early 2020s, Swiss 10-year fixed mortgage rates have already settled back around 2.1% as of mid-2025 — comfortably below the European average.

This environment creates something rare: a place where investors can park capital and sleep at night. Even during periods of global instability — COVID, inflation cycles, geopolitical volatility — Zurich’s real estate market has remained remarkably resilient.

Valuation Is Not the Same as Speculation

Yes, prices are high. But price alone doesn’t indicate overvaluation. In fact, Zurich's price appreciation has been driven by real, measurable demand, not artificially inflated by cheap money or foreign buying frenzies.

Foreign ownership, for instance, is carefully regulated under Switzerland’s Lex Koller law. That’s kept speculative bubbles in check, especially compared to global cities like London or Hong Kong. Furthermore, the city’s property market isn’t flooded with leveraged short-term investors. Swiss households, while highly mortgaged in aggregate, tend to borrow responsibly and for the long term.

On the commercial side, yields on prime assets in the central business districts (Kreis 1 and 8) have compressed to 2.5–3.2%. While that may seem low to yield-seeking investors, vacancy rates in those locations remain below 2%, and tenant demand continues to strengthen. Zurich doesn’t promise dramatic upside. It promises reliability, and in today’s global context, that’s often worth paying for.

Scarcity Is Built Into the System

Zurich isn’t just a city with limited land — it’s a city that enforces scarcity. Zoning regulations are strict. Height restrictions limit densification in many parts of the city. New developments face long permitting cycles, and greenfield opportunities are practically nonexistent. Environmental impact regulations and building standards further slow the pace of supply.

What does that mean in practice? Even small upticks in demand — whether from immigration, job growth, or relocation — can cause outsized price increases. There simply aren’t enough new units entering the market to absorb population growth.

This supply-side rigidity is not a bug — it’s a feature. And it’s one of the key reasons Zurich has avoided the boom-bust cycles seen in more speculative real estate environments.

Demand Isn’t Just Steady — It’s Structural

What separates Zurich from other stable markets is not just that it’s safe — it’s that demand continues to deepen. Over the past five years, the city has experienced consistent, above-average population growth, much of it driven by high-skilled migration.

Major tech and finance players are expanding or anchoring their European operations in Zurich. The Ethereum Foundation is headquartered here. Google’s Zurich office is one of its largest campuses outside the U.S. And biotech and AI startups continue to emerge from ETH Zurich and University of Zurich's innovation ecosystems.

In addition, high-net-worth individuals, digital nomads, and global families are increasingly seeking Zurich for its safety, healthcare system, and lifestyle. This is not transient capital — it’s long-term relocation. And that means more sustained demand for mid- and upper-tier residential property, as well as for thoughtfully located commercial and mixed-use assets.

Are You Paying for Quality, or Overpaying for Momentum?

So, has Zurich become “too expensive”?

In absolute terms, perhaps. But in risk-adjusted terms, it still offers excellent value — particularly if your investment horizon is longer than five years. Investors aren’t just buying income streams or cap rates here. They’re buying political stability, legal clarity, currency strength, demographic consistency, and extreme supply discipline.

These factors don’t show up on simple yield spreadsheets — but they are deeply understood by institutional investors who continue to allocate to Zurich real estate as a capital preservation strategy.

Still, where and how you invest matters. The alpha is not in buying another prime office on Bahnhofstrasse. It’s in identifying:

• Submarkets like Oerlikon, Albisrieden, or Seebach, where infrastructure upgrades are driving livability.

• Older residential stock with conversion potential to multi-family or serviced living.

• Underutilized commercial buildings in upzoned areas.

• Small-to-mid scale logistics and flexible office spaces in mixed-use corridors.

Where We See Opportunity at PhoenixRevoco

We continue to view Zurich as a core geography — but not for “passive” capital. We focus on underappreciated assets where repositioning, repurposing, or unlocking of underutilized space can create meaningful value over time.

Whether it’s:

• Navigating rezoning applications in overlooked industrial parcels,

• Partnering with local developers to deliver multi-family units in transit-adjacent suburbs,

• Or structuring operator-led investments into serviced real estate platforms,

…we believe the Zurich market still has plenty of value to offer — if you know where to look, and how to operate.

Final Thought: Pricing In the Intangibles

Zurich real estate is no longer a “hidden gem.” But in a world of rising geopolitical risk, fluctuating currencies, and overbuilt metros, it offers something rare: enduring simplicity.

You’re not just buying square meters — you’re buying confidence in the rule of law, scarcity that compounds over time, and a customer base that’s growing in sophistication.

Is Zurich undervalued?

Maybe not on paper.

But for smart capital that values resilience over hype, and long-term clarity over short-term flash — Zurich still offers unmatched depth.