Swiss residential real estate market

30th October 2017
-IAM, News

Vitangelo Pagliarulo, Junior Financial Analyst

The federal statistics office, as every year, has recently published its survey concerning the evolution of vacancy rates in Switzerland. This statistic, which consists in calculating the percentage of vacant residences as of  June 1st compared to the total available residences from the previous year, has increased for the eighth consecutive year and has now reached a rate of 1.47%. This rate is the highest since 2000 and more importantly, it shows a strong acceleration. Between 2013 and 2017 it has increased from 0.97% to 1.47%, which represents a growth of around 50% in only a few years.

This strong increase is the result of the negative interest rate policy implemented by the SNB, which has pushed important investors, like insurance companies or pension funds, looking for stable and predictable returns, to turn to the real estate market. Besides, if we take a closer look to the statistic, which is composed of rental apartments, condominiums and single-family dwellings, we note that only the vacancy rate of rental apartments has increased. This segment, which is targeted by institutional investors, has increased from 1.4% to 2.3%, while the other segments have almost remained flat. As construction shows no signs of slowdown, there is a high probability to see this trend pursuing its course.