Increase in Swiss Population Outstrips Available Housing Construction Rates
Struggling to find an affordable pad in Switzerland's bustling cities? You're not alone. The ever-increasing demand for housing consistently overwhelms the meager supply, thanks to several factors that make building new homes a real challenge.
According to real estate economist Andreas Loepfe, the grim housing situation is just going to get worse. He predicts that rents will skyrocket over the next decade, reaching levels that’ll leave many scratching their heads in disbelief.
One of the primary reasons for the housing shortage is the construction activity in Switzerland hitting an all-time low. This issue is further compounded by rapid population growth and legislation that makes building on undeveloped land extremely difficult.
To be specific, the revised Spatial Planning Act, which came into effect in 2014, has made it a complicated process to obtain building permits, especially for new construction on undeveloped land. As a result, fewer permits are issued, making it increasingly difficult to meet the growing demand for new housing.
High-density construction, or densification, could potentially be a solution, but it's facing opposition from locals who raise objections to building projects. In Zurich, stricter noise protection regulations alone have caused almost 3,000 planned apartments to be blocked in 2024.
Despite the difficulties, construction isn't completely at a standstill. Developers are instead focusing on conversions – repurposing land that has already been developed – which can be more expensive, as it often involves demolishing old buildings. The percentage of conversions has risen from 30% in 2010 to over 36% in 2024, but the relief for the housing crisis remains elusive.
In summary, Switzerland's urban housing shortage stems from a combination of regulatory constraints, economic pressures, and a demand-supply mismatch, with tricky approval processes and high construction costs being the main obstacles. Without streamlined regulations, increased funding for social housing, and expanded public-private partnerships, shortages will persist, disproportionately affecting vulnerable groups.
Andreas Loepfe, a real estate economist, foresees a worsening housing crisis in Switzerland, with rents projected to soar to incredulous levels by 2034. The revised Spatial Planning Act of 2014 has made obtaining building permits for new constructions on undeveloped land challenging, resulting in fewer permits issued and exacerbating the housing shortage. In Zurich, stricter noise protection regulations have halted 3,000 planned apartments in 2024. Despite the challenges, developers are focusing on conversion projects, which, although more expensive, account for over 36% of construction activity in 2024, offering only partial relief for the ongoing housing crisis.
