Which procedure does my bank use for my single-family home or my condominium apartment?

Very likely the hedonic valuation. UBS, Raiffeisen, ZKB and practically all other Swiss banks use hedonic models as the standard method for residential property. For special objects (luxury, listed, large plots), a full report is used additionally or alternatively.

What is the difference between market value and lending value?

The market value is the expected market value in a normal sale. The lending value is the — usually conservatively set — internal bank figure from which the bank derives the maximum possible mortgage (usually 80 % of it). The lending value often lies 5–15 % below the market value.

How accurate is a hedonic online estimate?

For standard objects in transaction-strong regions, typically ±5–15 % of the actually achieved price. UBS itself states that deviations of up to 20 % are possible. For luxury, special or rare objects, the spread is significantly larger — hedonic models should there be supplemented by a manual estimate.

Is a full report worthwhile for a normal single-family home?

For a pure purchase, usually no — the bank valuation is sufficient. A full report (CHF 1,500–3,500) is worthwhile above all for inheritances, divorces, unusual objects, planned special reports or if as seller you need an officially recognised valuation for the tax or inheritance authority.

When is the DCF method preferred over the classic capitalised earnings value?

Whenever the future cash flow is recognisably variable: in refurbishments, staggered tenancy contracts, vacancy risks, ESG investments or large institutional portfolios. Investment foundations under OAK BV supervision typically value their real-estate holdings via DCF.

Can I argue against an overpriced purchase price with a valuation?

Yes, and you should do so. A written estimate — ideally from an SIV- or SVIT-certified person — is significantly more effective in negotiations than mere opinion. It can also become court-proof should it later be a question of rescission or reduction.

What does a paid online estimate in Switzerland cost?

Publicly accessible paid tools (PriceHubble, Wüest Online, Neho et al.) typically cost CHF 100–300 per estimate. They deliver a PDF evaluation with a confidence interval and comparison values. As part of a mortgage quote, the bank valuation is usually free of charge.

Hedonic, Capitalised Earnings, Replacement Value: 3 Valuation Methods Compared

Three market-value methods dominate in Switzerland: hedonic valuation (the banks' standard for condominiums and single-family houses), the capitalised earnings value method (Ertragswert) for investment properties, and the replacement value method (Realwert) for special-purpose properties. Which method applies depends on the property type, the occasion and the client — often several are combined. Market value (Verkehrswert), lending value (Belehnungswert) and purchase price can easily differ by ten to twenty percent. The common framework is the Swiss Valuation Standard (SVS) from SIV, SVIT valuers, RICS Switzerland and HEV Zurich.

How does hedonic valuation work — and how accurate is it?

UBS publicly reports that its hedonic model evaluates around 70 criteria; the specific property is fed in with around 50–70 characteristics. From hundreds of thousands of real transactions, a multiple regression estimates the most probable market value, usually including a confidence interval. For standard properties, the accuracy is ±5–15 % of the price later achieved; UBS openly states that an online estimate can deviate by up to 20 % from the actual market value. Zürcher Kantonalbank (ZKB) was the first bank to introduce hedonic models into credit assessment in 1998.

How is the capitalised earnings value calculated — and why does the cap rate move millions?

Capitalised earnings value = annual net income / capitalisation rate. Example Zurich-Affoltern: gross target rent CHF 240'000 p.a., less 18 % management and maintenance costs, yields a net income of CHF 196'800; at a cap rate of 3.50 % this results in ≈ CHF 5'623'000. If the cap rate rises to 4.50 %, the value falls to ≈ CHF 4'373'000 — one percentage point moves the value by over one million francs. Current rates (as of 2026) range from 2.50–3.25 % for premium lakeside locations to 5.00–6.50 % in peripheral municipalities.

What does the replacement value tell us — and why is it not a market value?

Replacement value = land value + depreciated construction value + external facilities/surroundings. The depreciated construction value is the new-build value less age-related depreciation over the economic lifespan (e.g. 80–100 years). The intrinsic value is not the market value: an identical villa can achieve a market value of CHF 4 million on Lake Zurich, while the intrinsic value is only CHF 2.4 million — the difference being the location and demand premium. The replacement value is used mainly for special-purpose properties, insurance values, certain tax valuations and estate divisions.

What does a property valuation cost in Switzerland?

Self-valuation via listings costs CHF 0 (±15–30 %), a free online estimate CHF 0 (±15–25 %), a paid tool such as PriceHubble CHF 100–300 (±10–15 %). The bank valuation in the mortgage process is usually free (±10–15 %). A full report from a certified valuer (SIV/SVIT/RICS) costs CHF 1'500–3'500 at ±5–10 %, and a court/special report CHF 3'500–8'000+ (±3–5 %).

What distinguishes the DCF method from the classic capitalised earnings value?

The discounted cash flow method (DCF) explicitly considers the first 5–15 years with variable cash flows (rent increases, vacancy curves, CapEx) before attaching a perpetual annuity — the classic capitalised earnings value directly capitalises a constant sustainable net income. For regulated vehicles, DCF is often implicitly mandatory (OAK BV, FINMA): investment foundations under the supervision of the OAK BV typically value their holdings by DCF. For owner-occupied residential property, DCF is over-dimensioned.

Market value, lending value, purchase price — what is the difference?

The market value (Verkehrswert) is the price probably achievable in a normal sale within a customary period; in the SVS the term market value is used practically synonymously. The lending value (Belehnungswert) is the usually conservative internal bank figure from which the bank derives the maximum possible mortgage (as a rule 80 % of it) — it often lies 5–15 % below the market value. The purchase price is what is actually agreed. These values can easily differ by ten to twenty percent.