Due to its chronic housing shortage, finding a reasonably priced flat in Zurich has been a major challenge for the residents of Switzerland’s largest city. But now this could become easier.
If you have tried to rent in Zurich in the past few years, perhaps you have had to stand for hours in a long queue with other flat seekers, awaiting your turn to view an apartment.
Such sights are the norm rather than exception in the city (and canton) with extremely low vacancy rates, and where the demand for rental housing by far exceeds the available supply.
Among the reasons for the tight market is that Zurich’s economic opportunities attract scores of foreign nationals, with whom local residents have had to compete for scarce housing.
READ MORE: Zurich hit by affordable housing shortage amid record-high immigration
At the same time – due to various building restrictions and ordinances – construction activity has not been able to keep up with the increasing demand.
And most residential units are geared towards high-income tenants, so the acute shortage mostly impacts the middle and low-price segments.
This situation could, however, ease in the near future – even if only slightly.
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What’s going on?
A real estate study carried out by the Zurich Cantonal Bank (ZKB) indicates that the situation is easing somewhat. “
“The queues at apartment viewings are getting shorter again,” said ZKB’s real estate expert Jörn Schellenberg.
Driven by more construction projects and lower immigration, there are now more vacant apartments available than there were a year ago, even if the vacancy rate has risen only marginally – rom 0.48 to 0.52 percent.
In all, ZKB experts expect 8,500 new apartments in the canton of Zurich by the end of the year, and 9,000 in 2027.
In fact, Zurich’s vacancy rates now are higher than in other Swiss regions, where the number of available rentals has dropped.
“We see this development as the first sign of a trend reversal,” Schellenberg said.
Will better supply mean that the notoriously high rents will fall?
There is good and bad news on that front.
The ZKB analysis reveals that though new rents won’t rise as sharply as in the past, they will not be significantly cheaper either.
And many tenants could actually be hit with higher rents.
That’s because the ZKB expects mortgage reference interest rates to go up at the end of 202, allowing landlords to increase the rents by around 3 percent.
This development will, however, affect tenants in Switzerland as a whole, and not just in Zurich.
