Vacancy rate for apartments: fewer vacancies in owner-occupied segment

Vacancy rate for owner-occupied housing falling for first time in a long while

Vacancy rates in the Swiss housing market are continuing to grow – though not in all segments. While rental apartments often remain vacant, the owner-occupied segment shows a very different picture. There, the vacancy rate for apartments has fallen for the first time in years.

Vacancies for rental apartments continue to rise at a significant rate

Vacancy rates in Switzerland have risen this year for the tenth time in succession. The Swiss Federal Statistical Office reports 75,323 vacant residential units as at June 1, 2019, corresponding to 1.66% of the total housing stock. However, the increase was significantly weaker than in previous years.

The rise is solely attributable to rented accommodation. Here the vacancy rate has risen to 2.64% in the last 12 months, having more than doubled in the space of ten years. This is in complete contrast to the situation in the owner-occupied segment.


Condominium vacancy rate is falling

Last data point: June 1, 2019

Source: Swiss Federal Statistical Office, Credit Suisse

Vacancies are lower in owner-occupied segment

Vacancy rates for owner-occupied property have fallen for the first time since 2011, by 72 units in total. This is down to a fall in the number of vacant condominiums. Vacancy rates for single-family dwellings, on the other hand, have risen slightly. The trend is explained firstly by the fact that the number of building permits granted for condominiums and single-family dwellings has continued to decline over the past year, in both cases by more than 10%. Coupled with the healthy state of the economy, lower mortgage interest rates are likely to have supported the demand for owner-occupied.


Construction activity in the housing market (owner-occupied) is slowing

Last data point: 07/2019

Source: Baublatt, Credit Suisse

Vacancy rates of rental apartments and residential properties showing growing urban-rural divide

The supply of housing is particularly tight in the five largest Swiss cities. Over the past 12 months, the vacancy rate has stagnated at a very low 0.46%. In contrast, the vacancy rate in many rural areas and suburban communes has continued to climb. In the cantons of Solothurn, Thurgau, Ticino, which have already been affected by the supply glut, the vacancy rate is now 3% – considerably higher than the average. This shows that in the Swiss housing market the divide between those living in the city and those living in country has continued to widen.

Vacancy rates for apartments in the Swiss market are continuing to grow

Despite a decrease in building permits, vacancy rates on the Swiss housing market are likely to go on increasing in 2020. This is once again attributable to rental apartments. Here the vacancy rate is likely to climb further towards the 3% mark over the next year, and to settle at an above-average level in the medium term too. In the owner-occupied segment, available demand is likely to exceed the supply of new homes in the coming quarters too despite rising prices.

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