|  Ramzi Chamat

The residential vacancy rate is changing.

The dynamics of the Swiss real estate market have undergone significant turning points since the introduction of negative interest rates in 2014, ushering in an era of notable fluctuations in residential vacancy rates. In 2023, we observe a marked reduction in this rate, a phenomenon that deserves in-depth analysis to understand the implications and underlying trends. This article aims to decipher these developments, offering a detailed overview of recent data, regional disparities, and the economic impact on the Swiss real estate market. Necessary insight for all those seeking to understand the forces that shape housing in Switzerland today.




The real estate market in Switzerland has long been perceived as a pillar of stability and prosperity in Europe. However, since the end of 2014, with the introduction of negative interest rates and under the impulse of sustained demographic growth, the sector has undergone significant transformations. As of June 1, 2023, the residential vacancy rate stands at 1.15%, marking not only the end of a long cycle of vacancy but also the dawn of a new era for Swiss real estate. The repercussions of these changes are considerable and affect all market players, from owners to tenants, not to mention the economy as a whole.



I. Context and Key Data


According to recent publications from the Federal Statistical Office (FSO), the Swiss real estate landscape is in full transformation. In the span of one year, Switzerland recorded a notable decrease of 7,000 vacant units, resulting in a total of 54,700. This movement represents a real paradigm shift, bringing the residential vacancy rate to its lowest level since the introduction of negative interest rates in 2014. This downward trend was mainly observed in the cantons where vacancy rates were above the national average, while the regions of Zurich, Geneva, and Central Switzerland seem to have already reached a floor threshold. On a national scale, the segment of unoccupied rental housing saw a decrease of more than 8,000 units. Concurrently, the number of housing units put up for sale experienced a slight increase, adding a layer of complexity to the overall Swiss real estate picture.



II. Regional Disparities and Housing Size


Regional disparities in the Swiss real estate sector are striking and deserve particular attention. The cantons of Geneva and Zurich, as well as those of Central Switzerland, stand out with exceptionally low vacancy rates, hovering around 0.5%. On the other hand, the cantons of Ticino, Solothurn, and Jura present significantly higher figures, with Jura even recording a slight increase.


These contrasts are even more striking when looking at the distribution based on housing size. Small and medium units, comprising up to four rooms, are in high demand, with a reduction of nearly 15% in vacant units. Conversely, more spacious dwellings, with five rooms or more, see their number of vacant units increase by almost 10%.


This trend highlights a notable change in housing preferences, with a marked inclination for smaller and more affordable spaces. It also reflects the economic repercussions on the residential choices of the Swiss in a context where rents and consumer prices are constantly rising. These elements together play a crucial role in understanding the current and future dynamics of the Swiss real estate market.



III. Economic Analysis and Future Prospects


The current situation of the Swiss real estate market has significant economic repercussions. The significant increase in the migration balance over the last twelve months, by 25% compared to the previous year and 70% compared to the pre-pandemic period, reflects a growing demand for housing. However, this demand is faced with a probable slowdown in construction activity, due to a reduction in the number of building permits issued in the last two years.


In this context, we anticipate a continuation of the decrease in the vacancy rate, which could fall below the 1% threshold by June 1, 2024. This upward trend should, in turn, exert upward pressure on rents. We forecast that asking rents will experience an increase of 2.5% year-on-year at the end of 2023, and we expect this trend to continue in 2024, with an increase that could reach 5%.


These elements, combined, outline a future where available housing will become scarcer, and the costs associated with renting will be higher. This situation should moderate the tendency to move and influence the size of households, thus stabilizing the vacancy rate from 2025 onwards. This analysis underscores the crucial importance of closely monitoring market developments to understand the challenges and opportunities to come in the Swiss real estate sector.





The real estate sector in Switzerland is currently at a turning point, marking the end of an era and the beginning of another. The rapid decrease in vacant homes and the anticipated rise in rents are the precursor signs of a rapidly changing landscape. These changes require increased attention and vigilance on the part of market players. A meticulous examination of the residential vacancy rate reveals the dynamics at play and highlights the crucial importance of adopting informed strategies and having an in-depth knowledge of the sector to successfully navigate this new environment.


Source: UBS SA

Shortage of nearly 50,000 housing units throughout Switzerland within the next three years.

Shortage of nearly 50,000 housing units throughout Switzerland within the next three years.

Rising prices of single-family homes in Switzerland: A persistent trend.

Rising prices of single-family homes in Switzerland: A persistent trend.