Rents in Switzerland Climb Again in Q2 2024

Rents in Switzerland are on the rise once more in the second quarter of 2024. Discover the key factors behind this upward trend.

The rental housing market in Switzerland is experiencing a notable surge, as highlighted in the latest quarterly report from the esteemed real estate firm Wüest Partner. However, amidst this upward trajectory, there are whispers of a potential shift, with increased construction activity on the horizon that may herald a more balanced housing landscape.

In the second quarter of 2024, rental prices in Switzerland escalated by a striking 6.4 percent year-on-year, according to Wüest Partner’s latest Immo-Monitoring report. This figure paints a rather grim picture for prospective homebuyers, as property prices are also on the rise in various locales across the country. Specifically, the average sale price of condominiums surged by 3.5 percent compared to the same quarter in 2023, while single-family homes saw an increase of 2.5 percent.

Interestingly, a surge in building permit applications suggests that construction activity may soon gain traction. Wüest Partner notes that the combination of population growth and sluggish construction has led to a rather stagnant housing situation, with no immediate relief in sight. However, the number of applications for apartment building permits soared by an impressive 22 percent in the second quarter of 2024, totaling a staggering 34,150 units. This uptick could signal a forthcoming acceleration in construction efforts.

Yet, with these permits still pending, the question remains: will this flurry of applications actually translate into a tangible increase in housing supply? The reality is that the journey from planning application to project completion is often a lengthy one, typically spanning several years. Moreover, the volume of planning applications submitted thus far is unlikely to suffice in meeting the burgeoning demand for housing in Switzerland. Consequently, Wüest Partner predicts that housing shortages will persist, continuing to cast a shadow over the Swiss rental market for the foreseeable future.

In summary, while the Swiss rental market is currently buoyant, the potential for new construction offers a glimmer of hope. However, until these projects materialize, the Switzerland real estate market may remain a challenging landscape for both renters and buyers alike.