Europe's most severe housing crisis resides in Switzerland, highlighting reasons behind this predicament.
Living in Switzerland: A daunting housing market
If you've sought an affordable abode near major Swiss cities, you're well aware of the grim reality of the real estate market. This bleak scenario has been confirmed by a recent study conducted by the real estate appraisal company, Wüest Partner.
This analysis evaluated the housing situation across 27 European countries, taking into account factors like population growth, purchasing power, and permits issued for construction projects. Guess where Switzerland places among the rankings? Yep, fourth from the bottom. The only countries that fare worse are Luxembourg, Ireland, and Norway.
A report from the Federal Housing Office also highlights the "very tight" market, particularly in German-speaking Switzerland, where the dearth of housing continues to worsen. The population boom, unsurprisingly, is a prime factor in this cocktail of woes, as per Wüest Partner. After all, as Professor Philippe Wanner from the Institute of Demography and Social Economics at the University of Geneva explains, Switzerland has enjoyed uninterrupted demographic growth for a while now. This escalation is fueled by the nexus of two key factors: Switzerland's labor market shortage driving a need for foreign workers, and these new arrivals creating a demand for housing.
However, it's not just population growth that's wreaking havoc on Switzerland's housing market. The analysis also reveals a substantial deficit in the construction of new homes. The reasons? One, building permits have dropped by a whopping 27% over the past five years, making meeting the growing demand for housing even more challenging. Second, stringent environmental regulations, which govern aspects like noise levels in housing projects, pose hurdles to construction. To build more and satisfy the demand, at least some of these regulations might need a relaxation.
Unfortunately, adding more space isn't an easy fix, given Switzerland's limited land area. The population of this small yet populous nation is projected to hit the 10-million mark within a few years. The exact timeline varies among experts, with some predicting 2040 while some, like Céline Schmid from the Federal Statistical Office (FSO), suggesting it could be as soon as 2034.
While a solution to the scarcity of land might be elusive, the future does hold one promising trend—densification. Essentially, this means constructing new apartments in close proximity to existing ones, rather than building on vacant land. This approach is favored, especially in cities like Zurich and Basel, as per the Federal Office for Spatial Development (ARE). In fact, nearly six in ten building permits for residential developments involve projects on already built-up plots. These projects can include the repurposing of old industrial sites, extensions of existing buildings, or renovations.
As the housing crisis persists, various potential solutions are under consideration. Shared housing is growing in popularity, particularly in Zurich, offering a more affordable alternative for residents. Legal reforms, regulatory adjustments, increased investment in affordable housing, and encouraging new construction are also being explored to address this pressing issue.
- Despite Switzerland ranking fourth from the bottom in housing affordability among 27 European countries, the population growth has continuously escalated, driven by a labor market shortage and an influx of foreign workers.
- The housing crisis in Switzerland is not only caused by population growth but also stemmed from a substantial drop in construction permits and stringent environmental regulations, posing significant impediments to new home development.
- As land scarcity looms over Switzerland's burgeoning population, densification is emerging as a promising trend, with the construction of new apartments in urban areas becoming increasingly popular in cities such as Zurich and Basel.
