Experts warn that Switzerland will continue to struggle with an inadequate supply of housing to meet the demands of an expanding population. These are the reasons why this is so.
Anyone who has been looking for an affordable apartment to rent in one of Switzerland’s larger cities likely knows how difficult and frustrating this process is.
Blame it on the fact that the ever-growing demand for housing largely outstrips the available supply.
According to real estate economist Andreas Loepfe, the already tight housing situation is expected to get even worse as time goes by.
As a result, “rents will rise over the next ten years to an extent that most people cannot imagine today”, Loepfe said.
As it is, housing supply cannot keep pace with the rapid population growth because construction activity in Switzerland is at an all-time low.
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Just how dire is this situation?
According to the SonntagsZeitung and other media, which analysed the evolution of Switzerland’s housing market, in the past decade, fewer apartments have been built per capita than at any time since the 1950s.
Looking just at the period between 2020 and 2024, only 52 new apartments had been built in each of these years per 100 additional residents – that is, people who immigrated to Switzerland in that time.
Why are fewer and fewer residential properties being built, even as the population keeps increasing?
One obvious and logical answer is that small Switzerland is not expandable, and there is not that much land left to build on.
But that is only one part of the problem.
Another is legislation.
Since 2014, when the revised Spatial Planning Act came into effect, it has become increasingly more difficult to build new apartments, especially on undeveloped land, which may be zoned as agricultural or is off limits to developers for other reasons.
Therefore, fewer construction permits are being granted: 27 percent less had been given out over the past five years, “making the demand for new housing increasingly difficult to meet”, according to a recent analysis by the Wüest Partner real estate company.
High-density construction (also referred to as “denification”) – when new apartment buildings are constructed in close proximity to existing ones, rather than on vacant land – could be a viable option, except that it is meeting with resistance from local residents who are lodging objections to building projects.
For instance, in Zurich, which has been in the throes of one of the worst housing shortages in Switzerland for a number of years, stricter noise protection regulations have blocked 3,000 planned apartments in 2024.
The construction activity is not totally at a standstill, however
Because putting up new buildings is subject to many rules and regulations, a number of developers have shifted their focus from new construction to conversions – that is, building on the already developed land.
That solution, however, is more expensive than constructing from scratch, as this method often requires the demolition of old buildings.
But given difficulties involved in receiving permits for new constructions, the number of these conversions has risen from 30 percent in 2010 to over 36 percent in 2024.
As a result, the residential construction balance – the difference between newly built and demolished apartments – is falling.
All of this means that the relief to the housing crisis is still a way off.
