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Living space in Switzerland is becoming increasingly scarce and unaffordable. This applies to both rental apartments and private houses. While mortgage rates are rising, home prices remain high. Too high. This makes them unaffordable for the majority of Swiss people.
A typical ten-year-old single-family home with 140 square meters of living space and two bathrooms currently costs 3.19 million francs, according to Zurich real estate consultancy firm Iazi. 2.25 million francs in Basel and 1.87 million francs in Bern. Who else could finance this?
Compression is not enough
“The majority of Swiss people cannot afford to buy a house either in the cities or in the service areas,” says Donato Scognamiglio (53), Chairman of the Board of Directors of Iazi.
The tenant market is similarly overheated: Rental prices for asking rents (i.e. newly advertised flats) have increased by an average of 4.4 percent in Switzerland over the last five years. Available rents have also increased recently due to the federal government increasing the benchmark interest rate.
The reason for the increase in housing costs is the same for private houses and rental apartments: supply is limited and demand is high. “Compression alone will not solve the problem,” says Scognamiglio. Experts agree that more needs to be built to counter the tense situation.
New buildings are too expensive
Problem: New buildings are often expensive. It is so expensive that neither buyers nor tenants can afford it. It seems that many flats in new buildings in Zurich are not rented when the move-in date arrives. At the same time, residents who can no longer afford housing are being pushed out.
New Swiss buildings have a high standard of construction. Scognamiglio is increasingly critical of this. “We have to build cheaper,” says the real estate expert. If the houses are demolished after 50 years and the building quality lasts for 100 years, it will be of no use.
Save money on building standards
“The Swiss have extremely high standards for construction,” says Scognamigio. For example, construction costs can be saved in rural areas thanks to sound insulation that does not need to meet as high standards as in cities.
Construction site reserves in Switzerland are small. The rate of undeveloped building areas decreased by 17.1 percent to 12.5 percent in 2022. The standard of future expansion will be decisive in determining which part of the population will still benefit from the last reserve of construction space.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
