Rental apartments: Significantly higher number of applications for new builds
Wüest Partner sees signs that the construction of rental apartments is gaining momentum. For the time being, however, the picture is characterized by further increases in rental and purchase prices.
Housing remains scarce in Switzerland, but there are signs that construction activity is gaining momentum. According to the summer update of Wüest Partner's Immo-Monitoring, the number of new building applications for rental apartments rose by 22% in the 2nd quarter compared to the same quarter of the previous year. Planning applications were submitted for 34,150 rental apartments.
The increase affects many municipalities, especially commuter communities, medium-sized centers and tourist communities, write the analysts at Wüest Partner. Among other things, they see a positive correlation between the area of undeveloped building zones in a region and the number of new rental apartments planned there. "The new dynamic is therefore not necessarily the result of more efficient and effective densification activities, but often a consequence of the use of undeveloped building zones," the experts conclude. As many permits are still pending, it remains to be seen whether the increase in building applications will actually lead to an increase in construction activity. In addition, it takes several years from the planning application to the completion of a property. This means that the gap between supply and demand will not yet be completely closed by the current increase in new building applications. In the short term, the housing shortage is therefore likely to continue to dominate the Swiss rental market.
Rents rise by 6.4% in Q2
Meanwhile, the ongoing shortage of rental apartments continues to drive up asking rents. The classic asking rent index recorded an increase of 6.4 % in the 2nd quarter. "As new construction activity is still faltering for the time being and the
population growth remains dynamic, a trend reversal in the development of asking rents is not to be expected in the short term," it says.
Prices for condominiums rise slightly faster
In view of the tense situation on the rental housing market and falling mortgage interest rates, prices for condominiums are also rising somewhat more dynamically in many places than at the end of last year. In the 2nd quarter of 2024, prices for condominiums rose by 3.5 % compared to the previous year, while single-family homes increased by 2.5 %. According to Wüest Partner, the real estate markets are booming, particularly in the tourist regions of Valais and Graubünden, with strong price growth for both first and second homes. (aw)
