• Switzerland's news in English
Immigration keeps Swiss housing market tight
Housing construction has struggled to keep up with demand, particularly in the Lake Geneva region. Photo: Federal Housing Office

Immigration keeps Swiss housing market tight

Malcolm Curtis · 9 Jul 2015, 11:19

Published: 09 Jul 2015 11:19 GMT+02:00

Facebook Twitter Google+ reddit

The housing market in 2014 showed price and rents “stabilizing at a high level”, suggesting that it is at the top of a real estate cycle, the Federal Housing Office (FHO) said in a summary published on Wednesday.

Construction activity is keeping pace with demand in most regions and the overall vacancy rate is “slightly on the rise” but the office said it was too early to announce an all-clear for Switzerland’s accommodation situation, which has remained tight for several years.

The reported noted there are disparities between regions and various segments of the housing market.

But the net immigration of 80,000 people last year bolstered demand overall, even as other factors dampened costs.

Declining interest rates are helping to lower some rental costs and tougher capital requirements for banks financing homes have kept a lid on prices, the report said.

Rents and property prices are already beginning to dip in the Zurich market, it said.

But “the contrary was observed in the Lake Geneva region”, where there was a sharp increase in the number of households in 2014.

Housing shortages in other regions caused prices to rise slightly, the FHO said.

While long-time tenants benefit from price controls that are tied to interest rates, newcomers face paying rents that are linked to supply and demand.

Landlords are free to raise rents when a new tenant takes over a lease.

The only regions with ‘balanced’ housing markets were in the northwest, the south and the southeast parts of Switzerland, the report said.

Despite the construction of new rental accommodation it said the number of new units overall has failed to keep up with demand stimulated by immigrants.

Rent increases can be expected this year if the number of households continues to increase, it said.

However, if the current economic slowdown leads to a reduction in immigration and a decline in demand from the existing population, “imbalances are likely to decrease in the rental housing market”.

Story continues below…

The findings are based on a study by the Zurich University of Applied Sciences and consultants Metas-Sys which said that housing construction has been unable to keep pace with immigration since 2005 leading to a penury of available units and an “enormous rise” in real estate prices, aided by low mortgage rates.

The number of foreign households in 2014 increased 3.1 percent to 669,142 from the previous year, while Swiss households edged up just 0.6 percent to 2.9 million from 2.89 million, said the study.

The research looks at the impact of the free movement of people agreement between Switzerland and the European Union on the housing market.

In the Lake Geneva region, where the greatest number of expat households were found (just over 175,000), prices for residential property soared by more than 45 percent from 2005 to 2104.

Prices increased by more than 46 percent in Zurich and 52.4 percent in Central Switzerland. 

For more news from Switzerland, join us on Facebook and Twitter.

Malcolm Curtis (news@thelocal.ch)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Wawrinka snubs past form to reach Basel second round
Wawrinka beat local wildcard Marco Chiudinelli. Photo: Fabrice Coffrini/AFP

US Open champion Stan Wawrinka has reached the second round in Basel after going out in the first round for the past four years.

Villagers asked to help fund bridge renovations
The bridge links the two villages of Veltheim (pictured) and Holderbank. Photo: Lutz Fischer-Lamprecht

The crowdfunding campaign by the two communes is the first of its kind in Switzerland.

Police discover body buried in Orbe house
File photo: Bas Leenders

Police have opened an investigation after finding a body buried in a house in Orbe, in the canton of Vaud, on Saturday.

Valais shaken by 4.2 magnitude earthquake
The earthquake hit in the canton of Valais near Sierre. Photo: Alain Rouiller

It's the biggest earthquake to hit the country for two years.

Swiss Indoors kicks off without champ Federer
Federer celebrates with ball girls and boys after winning the event in 2015. Photo: Harold Cunningham/Pool/AFP

Stan Wawrinka is top seed as injured Federer sits it out.

IOC hires Russian doping whistleblower as consultant
IOC President Thomas Bach confirmed the news. File photo: Fabrice Coffrini/AFP

The International Olympic Committee (IOC) has hired Vitaly Stepanov as a consultant and is helping his runner wife Yuliya.

‘Scary clown’ craze hits streets of Zurich
Photo: Pedro Pardo/AFP

Police in Zurich have warned so-called ‘scary clowns’ that they could face charges, following a number of incidents in the city.

VIDEO: driver chases runaway car on Swiss motorway
Image: Neuchâtel police

Shocking footage shows the moment a man dodged lorries to chase after his runaway car on a Swiss motorway.

Saas-Fee crowdfunds low-cost season ski pass
Saas-Fee is hoping to attract 99,999 season pass holders. Photo: Denis Emery/Photo-genic.ch

Skiers could get their hands on a whole season pass for just 222 francs ($223) in the Swiss resort of Saas Fee this winter – if enough people want one.

Swiss billionaire fined for dodging import tax
Urs Schwarzenbach owns the luxury Dolder Grand hotel in Zurich. Photo: Wilhem Rosenkranz

Urs Schwarzenbach faces a $4 million fine for failing to properly declare some 200 artworks imported into Switzerland.

Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
jobs available