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Half of all rental apartments in Switzerland are owned by individuals
Almost every second rental apartment in Switzerland is owned by individuals. However, according to a study, the share of pension funds, real estate funds and insurance companies in apartment rentals has increased significantly in the last two decades.
A total of 49 percent of rental apartments in Switzerland were owned by individuals in 2019, according to the latest “Real Estate Switzerland” study by Raiffeisen Switzerland. Meanwhile, a third of rental apartments (33 percent) were owned by institutional investors, followed by cooperatives (8 percent) and “traditional real estate companies” (7 percent).
Taking the roughly 4.5 million residential units in Switzerland, including condominiums and single-family homes, about 57 percent of the properties were owned by individuals, according to the information. The figures show that there cannot be a question of dominance by professional investors in the Swiss property market, Raiffeisen chief economist Martin Neff is quoted in the press release.
Institutions are catching up
However, a comparison of the ownership structure of rental apartments over some 20 years shows that institutional investors are clearly catching up. In 2000, they owned only 23 percent of the rental properties, increasing their share by ten percentage points. At that time, 57 percent of the rented apartments were still privately owned.
The Raiffeisen study found that the expansion of the real estate portfolio of pension funds and insurers was carried out mainly at the expense of the shares owned by private households. Shares of cooperatives, classic real estate companies and the public sector, however, remained relatively stable during the period.
Still hardly any vacant residential property
At the moment, there are hardly any single-family houses and condos for sale in Switzerland, as the study finds. This is also demonstrated by the low vacancy rate in the property segment, which is only 0.57 percent. By contrast, 2.76 percent of all rental apartments nationwide are vacant.
In the five largest cities of Zurich, Basel, Bern, Lausanne and Geneva, only 111 properties were vacant as of June 1, 2020, according to Raiffeisen. However, there are regions with significantly more vacant properties, banking economists emphasize: In Valais and Jura, for example, more than 1 percent of all single-family homes and condos are vacant.
Supply shortage
Despite the corona pandemic, there is still a demand for single-family homes and condos. For economists, this can also be seen in the growth in the volume of mortgage loans, which at a good 2.5 percent is still at a “respectable level”.
There are also reasons for “confidence in the domestic market”. In addition to the continued intact demand, a new supply shortage is expected in the future. Project developers continued to apply the brakes when planning new condominiums and single-family homes; consequently, fewer such properties are likely to hit the market in the future. (aeg / sda / awp)
