Ongoing easing on the housing market
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Ongoing Easing on the Swiss Housing Market

Vacancies increased further in 2015. Although the vacancy rate for Switzerland as a whole is at an unproblematic 1.19 percent, the trend in vacancies and an analysis at local and segment-specific level suggest an increasing emergence of imbalances. 

On June 1, 2015 there were 51'172 empty homes in Switzerland. This increase by 5424 units significantly lifts the vacancy rate for the second consecutive year, to a figure of 1.19 percent (cf. figure), the highest level since 2001. The trend highlights an opening gap between supply and demand, and the supply rate underscores this picture. The rising number of homes advertised for rent and for sale suggests increasing difficulty in marketing rental apartments as well as owner-occupied housing.

Vacancy Trend in Switzerland

Vacancy Trend in Switzerland

Vacancy rate (rhs) and change in number of vacant homes (lhs)
Source: Swiss Federal Staistical Office, Credit Suisse

Particular Rise in the Rental Apartment Segment

A majority of the increase stems from the rental apartment segment (cf. figure). The addition of 4361 empty rental flats indicates that the effect in this segment is even stronger than in the previous year. This is because the unusually high output of rental apartments in recent quarters coincided with a slight deceleration in demand momentum. The rental apartment segment is heading inexorably towards an oversupply – albeit at a glacial pace. Given the persistent shortage of decent investment opportunities, investors will probably continue to funnel assets into the rental housing market; a trend reversal is unlikely in 2016. Vacancies also rose by 1063 units in the owner-occupied segment. Here, the supply has responded to dwindling demand for owner-occupied housing, and the number of objects in planning is decreasing – thus limiting the rise in vacant homes.

Higher Vacancies in More than Two-thirds of All Regions

Vacancy rates increased in more than two-thirds of Switzerland's 110 economic regions over the last 12 months, indicating a broad base for the easing trend (cf. figure). The exceptions to this development are the major urban areas, where vacancies increased only slightly. Outside the major centers, where available tracts of land are larger, construction of rental apartments was correspondingly brisk, pushing the vacancy rate up further from an already high level. Regions affected included parts of the Central and Western Mittelland as well as certain parts of East Switzerland and Valais. 

Regional vacancies 2015

Regional Vacancies 2015

Vacancy rates 2015, arrows: year-on-year change
Source: Swiss Federal Statistical Office, Credit Suisse, Geostat

More information on the Swiss real estate market can be found online in the study "Real Estate Monitor Switzerland" at www.credit-suisse.com/research.