More building and slower immigration are taking pressure off the rental market. But rents are still rising.
Finding a flat in Zurich has long meant crowded viewings and frequent rejection. Now there are tentative signs of relief. Zurich Cantonal Bank (ZKB) sees a possible turning point as construction picks up and immigration slows.
The canton’s vacancy rate rose from 0.48% to 0.52% in 2026, even as Switzerland’s overall rate fell from 1.01% to 0.93%. The increase was most pronounced in Zurich’s surrounding urban areas. In the city itself, vacancies edged up but remained low.
Supply is beginning to catch up. ZKB expects 8,500 new flats in the canton this year, compared with 8,200 in 2025, and 9,000 in 2027. Meanwhile, net immigration has fallen below the peaks of recent years. Together, these shifts should gradually ease competition for homes.
The effects could spread beyond Zurich. Housing shortages have pushed households towards cheaper neighbouring cantons, including Aargau, Thurgau and Schaffhausen, adding pressure to their rental markets. If more people can find homes in Zurich, that outward flow may weaken, eventually bringing some relief elsewhere.
Less pressure does not mean cheaper rents. In Zurich city, annual growth in advertised rents has slowed from more than 10% a few years ago to 1.5%. ZKB forecasts increases of 1.5% across the canton in both 2026 and 2027. It also expects higher energy prices to push up tenants’ ancillary costs.
Existing tenants may face increases too. ZKB expects the mortgage reference rate, which governs adjustments to many existing rents, to rise from 1.25% to 1.5% in the second half of 2027. The bank argues that a growing share of mortgages tied to Saron, a short-term interest-rate benchmark, will make the reference rate respond more quickly to the monetary tightening it forecasts for next year.
For people seeking a flat, the outlook is a little brighter. For those hoping to pay less, there is scant comfort.
More on this:
ZKB report (in German)
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