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HOUSING

How bad is Switzerland’s housing shortage and what can be done about it?

Switzerland has been impacted by a scarcity of available dwellings — and consequently, high rents — for a longtime. So what do experts believe needs to be done to remedy the situation?

Published: 13 September 2023 16:22 CEST
How bad is Switzerland's housing shortage and what can be done about it?
More construction activity should be permitted, experts say. Photo: Pixabay

If you are currently looking for rental accommodation in Swiss cities, especially on a limited budget, you’ll know how frustrating this endeavour can be.

And if you think things are getting worse on the housing market, you are right: statistics show that, compared to 2022, the number of available apartments has fallen from 1.31 to 1.15 percent nationally.

In cities, the demand for rental housing is particularly high — a phenomenon that is not new, but steadily worsening.

“The situation is particularly tense in urban areas,” said Ursina Kubli, head of real estate research at Zurich Cantonal Bank.

Whether this is due to increasing numbers of new immigrants who, according to some, put added pressure on housing and rent prices, or just the general evolution of the market, the fact is that the number of residents in Switzerland’s major cities is growing, and the supply of accommodation is lagging behind the demand.

How does this high demand / low supply ratio affect rents?

Many rent prices are set to increase in October due to higher reference rates.

But that is just one of the reasons for soaring housing costs. Another has to do with the lack of vacant units.

“Wherever the vacancy rate is less than 1 percent, the scarcity of housing pushes rents up,” according to Marco Salvi, head of research at Avenir Suisse, a think-tank for economic and social issues.

In Zurich right now, the vacancy rate is 0.53 percent and in Zug, 0.42 percent.

Consequently, rents in these two cantons are, along with Geneva, the highest in Switzerland.

READ ALSO: Where in Switzerland rent prices are highest and lowest right now

What can be done to solve this problem?

One issue, which obviously can’t be resolved, is scarcity of land, as Switzerland is a small country and space to construct new buildings is limited. and not expandable.

However, various other suggestions have been put forth in the past as well, ranging from simplifying building permit procedures to limiting immigration.

READ ALSO: How can Switzerland solve its housing shortage and curb rents?

Among those that appear to be easily implementable (assuming there is sufficient political will to make it happen) is loosening certain regulations currently in place.

Among them are noise ordinances, which have slowed down construction activity.

Swiss construction and environmental legislation regulates the level of noise allowed in housing projects, but in order to build more so that demand can be met, “strict regulations such as those relating to noise protection would have to be relaxed,” Kubli said.
 
 

Member comments

  1. Your “comments” sections need to improve. First, the comments do not show up under the article, so it makes it difficult to find and connect with the article, you restrict the comments to 500 characters making it very difficult to get all the relevant information out. Having to count 500 characters before I am blocked is also time-consuming and frustrating, if there is an “APP for this, I do not know it.

    1. Hi Frances, fair points. We are working to improve the comments section so comments appear quicker and you can include more information.

  2. You will always have a scarcity of available dwellings in a place where everyone wants to come and live. But Switzerland can not afford to give up all its virgin farmland to build and build until what end? There is so much building that has happened these last few years what more can be done? Switzerland can not accommodate everyone there has to be limits.

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For members

RENTING

The parts of Switzerland where you’ll struggle to find somewhere to rent

Finding it hard to secure a place to live in Switzerland? You’re not alone, according to new figures released by the Federal Statistics Office (FSO). Some communities are without a single property for rent a sign of the growing housing crisis in the country.

Published: 17 September 2024 15:45 CEST
The parts of Switzerland where you'll struggle to find somewhere to rent

New data released last week by Switzerland’s statistical record keeper has revealed that across Switzerland as of June 1st, the number of vacant properties stood at a record low of 51,974. This leaves the vacancy rate threatening to dip below one percent – indicating a housing shortage.

To no surprise, some of the significant shortages are concentrated within the business and diplomatic capitals of Zurich and Geneva.

However, the study also found that over 200 towns across the country are without a single vacant property, as city workers seek a quieter life in the countryside. 

READ MORE: Is autumn 2024 the right time to buy a property in Switzerland?

Commuter spread

Close to Geneva, the towns of Presinge and Laconnex reported no vacant properties, as commuters travelled roughly 20 kilometres each day into the city to work. 

The same can be said of the communities of Lonay and Vaux-sur-Morges, both within a 20 minute drive of Lausanne city centre. 

Some 35 minutes away from Zurich, Schlatt bei Winterthur also reported no vacant properties. 

Other concentrations of communities without vacant properties could be found in Aargau, and in Graubünden, both of which have concentrations of small and medium level businesses, as well as startups

Overall, over half of Switzerland’s cantons recorded a vacancy rate of less than one percent. 

These included Valois, Vaud, Basel-Stadt, Basel-Land, Glarus, Appenzell Inner Rhodes, Graubünden, Lucerne, Uri and Schwyz. 

At the bottom of the table, the canton of Zug reported a vacancy rate of 0.39 percent, while nearby Obwalden stood at 0.44 percent. 

At the other end of the scale, Jura had the highest vacancy rate of 2.98 percent while Solothurn followed at 2.37 percent.

House hunters will have their best luck looking in the Jura towns of Valbirse (7.99 percent) Romont (7.38 percent) and Mourier (6.73 percent). 

Lack of new builds

Much of the blame for the lack of vacant properties can be attributed to a slow down in the number of new properties built, in contrast to Switzerland’s surging population. 

Over the past decade, Switzerland’s population has almost reached nine million. 

READ MORE: Why renters in Switzerland still struggle to buy an apartment

Meanwhile, fewer building permit applications are being submitted, due to perceptions of legal hurdles and community objections preventing them being accepted 

As Ursina Kubli, Zurich Cantonal Bank’s Head of Real Estate Research prophetically stated in a 2023 study: “If construction activity is not turned around, we are heading straight for a housing shortage in Switzerland.”

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