There is a shortage of 10 thousand housing units in Switzerland

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Housing shortage in Switzerland is increasing. On the one hand, the number of households is increasing rapidly. On the other hand, because the construction activity has been declining for years. Only 42,200 new building permits were issued last year, the lowest level since 2003.

At the same time many additional apartments would be in demand at this time. This is demonstrated by new figures from real estate research by Wüest Partner. In the spring issue of Immo-Monitoring, the consulting company determined the number of additional households installed each year. The number is expected to increase from 50,000 in 2021 to around 55,000 new households in 2023.

Residential construction stalls

At the same time, according to the research, approximately 46 thousand new apartments will be built this year. This issue includes additions as well as new buildings and transformations. If you compare the number of households established with the annual number of building permits, it is clear that by 2023, around 10,000 flats will be missing in Switzerland.

This does not mean that 10,000 households will soon become homeless. But these flats are missing as the so-called surge reserve. These are the flats that must be empty in order for the existing households to move in. “If this fluctuation reserve is too small, rents for apartments advertised in the past have been seen to rise particularly sharply,” says Robert Weinert (44), Head of Property Monitoring at Wüest Partner.

More single households

In addition to declining construction activity, demand is also contributing to the housing shortage. One of the main reasons for high demand is population growth. But there are other factors as well. “The size of the additional digits has decreased markedly,” Weinert says. The smaller the households, the more flats are requested. This is directly related to wealth: when more people can afford to live alone, the number of households increases. Increasing life expectancy also means that more people live in one- or two-person households.

The structure of society is also changing: people are getting divorced or ending their relationships. This leads to an increase in household formations. Then there is immigration. The lower the unemployment rate in Switzerland, the more companies are forced to resort to workers abroad. This increases the number of households in certain regions.

Famine causes rents to rise

All this makes the construction of additional apartments urgent. It’s the only way to slow rent growth. Wüest Partner currently expects an average rent increase of 3.2 percent for advertised apartments in 2023. Existing leases are also getting more expensive. By June 1, 2023, the reference interest rate is likely to rise to 1.5 percent. This means rents on existing leases can be increased by 3 percent at the next termination date at the end of September 2023.

“Building new housing developments everywhere should not be the goal, at any cost,” Weinert says. Still, according to the expert, authorities can use more of the available room for maneuver and adapt the legal framework. “For example, by loosening individual regulations such as the noise protection regulation.” Or, if the building is ecologically sustainable, by increasing its use reserves – that is, more living space can be built per plot.

Source : Blick