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What does the coronavirus mean for Switzerland’s property market?

Housing in Switzerland has become more expensive during the coronavirus pandemic, a new study shows.

Published: 6 January 2021 11:57 CET
Updated: 12 January 2021 21:09 CET
What does the coronavirus mean for Switzerland's property market?
Housing is getting more expensive in many parts of Switzerland. Photo by AFP

While many experts feared that real estate market in Switzerland would collapse during the health crisis, the opposite has happened: rents, as well as purchase prices for houses and apartments have risen.

Figures released by ImmoScout24 Swiss Real Estate Offer Index on Tuesday show that at the end of 2020, single-family home prices were 5.6 percent above their level at the start of the year. This increase is virtually identical (+ 5.5 percent) for apartments.

The upward trend is also clear in rental market, where rents have increased by an average of 1.1 percent nationwide.

Both owned and rented housing is most expensive in the Lake Geneva region. Prices there increased by 2.5 percent by the end of 2020.

This finding is not surprising, as Geneva is an expensive city with a high cost of living, where it is unlikely, or at least difficult, to find cheap rentals in any of the decent neighbourhoods. 

Also, the vacancy rate is usually quite low, which drives the rents up.

For instance, an average monthly rent for 3.5-room flat in Geneva, which comprises a living room, kitchen, bathroom and two bedrooms, is 2,680 francs — the highest in Switzerland. 

In the greater Zurich area, another expensive region, prices have increased by 1.2 percent.

READ MORE: Cost of living in Switzerland: How to save money if you live in Zurich 

Price hikes were also noted in eastern Switzerland (1.3 percent), the northwestern regions (0.8 percent), as well as in central parts of the country (0.3 percent).

On the other hand, rents stagnated in the so-called Swiss Plateau, the area which includes cantons of Aargau, Solothurn, Bern and Fribourg.

In Ticino, they fell by 2.6 percent.

There is, however, good news for those who want to buy a property in 2021: mortgage rates remain low.

It is possible to get a 10-year fixed rate mortgage from 0.61 percent, and a 5-year fixed rate at 0.54 percent, according to Comparis, Switzerland’s price comparison service.

READ MORE: Switzerland's strangest taxes – and what happens if you don't pay them 
 

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APARTMENTS

Housing in Germany: People living in more space than ever before

People are living in increasingly larger spaces, according to data published Wednesday from the German Statistical Office.

Published: 29 July 2020 11:14 CEST
Housing in Germany: People living in more space than ever before
Newly built luxury apartments in Berlin in June. Photo: DPA

New data from Germany’s Federal Statistical Office shows that individuals are taking up an increasing amount of square metres.

At the end of 2019, apartments throughout the Bundesrepublik had an average size of 91.9 sq. metres, with each inhabitant accounting for 47 sq. metres. That was up slightly from 46.7 sq. metres in 2018.

READ ALSO: The words you need to know before renting a flat in Germany

In 2010, this figure stood at 45 sq. metres.

At the turn of the millennium, the average person lived in 39.5 sq. metres, up from 34.8 sq. metres in 1990.

At the same time, more and more people are living alone in Germany. Since Reunification in 1991, the number of one-person households has spiked by 46 percent. 

The number of households with three or more people, whether families or flat mates, has decreased by 20 percent in the same period.

Graph translated for The Local by Statista.

Growing number of apartments

More than two million apartments have been built in Germany in the past ten years – yet in many cities there remains a lack of affordable housing.

READ ALSO: The places in Germany where rents are rising rapidly

Researchers put the housing stock in Germany at 42.5 million units in both residential and non-residential buildings. That was 0.7 percent, or 277,400 dwellings more than one year earlier.

In the medium term, the stock has grown significantly: since 2010, it has increased by five percent, or two million housing units. 

In light of numerous construction projects throughout the country, the housing space in Germany has also increased by 6.2 percent to almost 3.9 billion sq. meters.

However, especially in cities such as Berlin, Munich and Frankfurt, large apartments are unobtainable for many due to the high rents.

For this reason, many tenants report being satisfied with less space when concluding new contracts, a recent study by the German Economic Institute (IW) showed.

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