Despite Corona, construction continues

In the rental apartment sector, construction is still going on during the crown crisis. This is the conclusion of a Credit Suisse study released Monday. Although the number of construction applications and building permits fell dramatically in March and April, the number of construction applications in the rental housing sector is now again above the long-term average, writes Credit Suisse.

Specifically, 21 percent fewer building permits were registered in this country in the first quarter of 2020 compared to the previous quarter. In the second quarter, however, this decline was largely offset by a 15 percent increase.

Seen as a four-quarter moving average, according to Credit Suisse, the decline in the first three months is “hardly noticeable anymore.” Rather, there has been an increase in building permits for rental apartments of 12 percent since the second quarter of 2019.

“The renewed increase in approval activity is also the result of the many large-scale projects for which planning requests were received in late 2018 and throughout the course of 2019 and which were only recently approved,” says the report from CS.

Overall, the big bank expects the rental apartment portfolio to expand 1.1 percent in the next 6 to 18 months. A year ago, this value was 1.0 percent. New rental apartments will be created especially around Zurich and in the Zug and Lucerne regions.