| Ramzi Chamat
The Swiss rental housing market is currently facing an upward trend, with demand for rental housing continuing to grow in the past year. This has led to lower availability on the rental housing market, especially in metropolitan centers. There are several reasons for this.
Firstly, the Swiss economy remains robust, with steady growth and low unemployment rates. This has led to an increase in demand for housing, particularly in urban areas. Secondly, immigration from abroad has risen sharply, with fewer foreign citizens moving away. This has further increased demand for rental housing.
However, despite the increasing demand, there has been a construction slump in Switzerland, leading to a lower availability of rental housing. Metropolitan centers in particular have recorded the biggest decline in rental apartments approved for construction in 2022, down 38% year on year. This means that relative to the absorption seen in recent years, rental housing production is likely to be too low in the majority (65 of 110) of regions in the coming one to two years.
As a result, vacancy rates in many places have fallen sharply, and rents are becoming significantly more expensive. These trends are expected to continue in 2023. Higher rents are likely to mitigate the risk of interest-related valuation adjustments for residential investment properties.
For renters, this means that finding affordable rental housing in desirable areas may be more challenging. However, for real estate investors, this presents an opportunity to invest in residential properties with the potential for higher rental income and capital gains.
In conclusion, the Swiss rental housing market is currently facing a demand-supply imbalance, with increasing demand and lower availability of rental housing. This has led to higher rents and presents an opportunity for real estate investors. The market is expected to continue on this upward trend in 2023, making it an exciting time for those looking to invest in the Swiss rental housing market.
