Switzerland's housing scarcity ranks among the most severe in Europe: reasons and implications
Rewritten Article:
Looking for an affordable place to live in Switzerland? You're not alone. The housing market in, and around, major Swiss cities is in a dire state, and a new study by Wüest Partner real estate appraisal company supports this fact. They analyzed the housing situation across 27 European countries, considering factors like population growth, purchasing power, and new construction projects.
The study revealed that Switzerland ranks among Europe's worst performers when it comes to housing shortages. It placed Switzerland in fourth place, with only Luxembourg, Ireland, and Norway doing worse. The situation has also been confirmed by a recently updated report from the Federal Housing Office, which notes that the housing market is "very tight," particularly in German-speaking Switzerland.
So, why is Switzerland suffering from such a severe housing shortage? Several factors come into play. Firstly, population growth is worsening the situation, as Switzerland has been experiencing continuous demographic growth for several decades. This increase is primarily driven by the convergence and interdependence of two factors: shortages in the Swiss labour market have driven demand for foreign workers, who, in turn, fuel a demand for housing.
The study also showed that not enough new housing is being built in Switzerland. There are two main reasons for this: firstly, building permits have dropped by 27 percent over the past five years, making it increasingly difficult to meet the demand for new housing. This is due, in part, to environmental legislation that regulates housing projects, making it necessary to comply with strict regulations to build more and meet the demand.
Land scarcity is another impediment to construction, as Switzerland is a small country, and space for new buildings is limited. While construction rules could possibly be eased, there is no way to solve the underlying problem of the scarcity of land.
With Switzerland's population now at just over 9 million and projected to reach the 10-million mark several years from now, the housing crisis isn't likely to improve anytime soon. However, Swiss authorities are taking measures to address the housing shortage. One solution being promoted is densification, which involves constructing new apartment buildings in close proximity to existing ones, rather than on vacant land. This approach is favored, especially in cities like Zurich and Basel, by The Federal Office for Spatial Development (ARE).
- Despite Switzerland's ranking as one of Europe's worst performers in housing abundance due to factors like population growth and insufficient new construction, authorities are promoting solutions such as densification to alleviate the housing shortage, especially in cities like Zurich and Basel.
- The housing market in Switzerland, particularly in German-speaking areas, remains "very tight," according to the Federal Housing Office, with the situation worsened by a decrease in building permits by 27 percent over the past five years, making it difficult to meet the rising demand for new residential properties.
- Switzerland's ongoing demographic growth, primarily driven by foreign workers necessitated by labor market shortages, and land scarcity as a small country have contributed to a severe housing shortage, impeding the construction of new sports facilities and other residential projects.
