Housing market: BWO observes further shortage in Zurich and Zug
According to the Federal Housing Administration, slowing construction of rental housing could exacerbate the undersupply in some areas.
Despite a slight easing at the national level, housing is becoming scarcer in some regions, especially in the Zurich and Zug areas. This is the finding of the latest edition of the "Free Movement of Persons and the Housing Market" monitor, which is compiled annually on behalf of the Federal Office of Housing (FHA). Although the situation in the Lake Geneva region has eased in 2021, market tension is increasing in other areas. This is particularly true for central Switzerland, where the strongest increase in foreign households was observed last year, and for Zurich. The BWO notes a "clear strain" in these regions, especially in the lower rental price segment; they are "clearly inadequately supplied". The counterpart to these very tight markets is the canton of Ticino, which has the most relaxed market in Switzerland.
The other regions of Switzerland are, on the whole, "almost in equilibrium". Predominantly in northwestern and eastern Switzerland, and to a slightly lesser extent in the Espace Mittelland, the rental housing markets provide a buffer for the scarce residential property. This buffer function is also necessary because the home ownership rate has declined since 2021. Ownership rates are still in the order of around 41% for Swiss households and 12% for foreign households. Accordingly, foreign households are not the primary cause of the rise in home prices.
Question marks immigration and construction activity
The BWO expects that the clear signs of overheating in the housing market will weaken in 2022/2023 due to rising interest rates. "Whether this will result in an easing in the hot spots of Zurich and central Switzerland remains to be seen." Declining trends weakened domestic demand, with the development of immigration and construction activity remaining open, he said.
The study "Free Movement of Persons and the Housing Market" has been conducted by the Meta-Sys AG/ZHAW consortium on behalf of the BWO since 2009. Its specific feature is the look at the development of domestic and foreign households as well as their incomes. In addition, the rental and home ownership markets are analyzed as a whole. (aw)
