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Last year there was a protest when 75,000 apartments were vacated for the first time. The increase actually accelerated this year. However, there are important regional differences.
The number of vacant apartments increases significantly.
For some time now, a number has been causing a growing concern in this country: that of empty apartments. It has risen steadily in recent years and reached a new high of over 75,300 in 2019. This year the trend has continued. According to the Federal Statistical Office (BfS), the number of vacant apartments, including single-family homes, was 78,800 as of June 1 this year.
There are more vacant apartments in five of the seven main regions
Compared to the previous year, this means an increase of around 3,450 apartments or 4.6%. Therefore, the increase has accelerated slightly, in 2019 around 3,000 additional empty apartments were reported, corresponding to an increase of 4.2%. The vacancy rate in Switzerland is now 1.72% (previous year 1.66%), but there are big differences, both from a geographical perspective and with regard to vacant properties.
Vacancies have increased in five of the top seven regions. This was most pronounced in the Ticino (+0.4 percentage points) and Lake Geneva (+0.2 percentage points) regions. Ticino is also the main region with the highest vacancy rate (2.7%). It is followed by the central plateau and eastern Switzerland (both 2.1%), which, however, are the only regions where the gap has narrowed, albeit only slightly.
Canton Solothurn has the highest vacancy rate
At the canton level, as in the previous year, Solothurn has the highest vacancy rate at 3.2%. It is followed by the cantons Ticino and Aargau (2.7% each) and Jura (2.5%). The lowest values are found in the cantons of Geneva (0.5%), Zug (0.7%), Zurich and Obwalden (both 0.9%) and Basel-Stadt (1.0%).
In absolute terms, most of the vacant apartments with around 10,700 units are in the canton of Bern and very few in Appenzell Innerrhoden (174). The largest increase in empty apartments was recorded in the canton of Vaud, where around 1,200 were added. On the other hand, the supply decreased in the cantons of Graubünden (–480 units) and Schaffhausen (–218 units).
Last year, the gap between the five largest centers and the rest of Switzerland widened. In general, the situation in Zurich, Bern, Basel, Geneva and Lausanne has remained almost unchanged. The average vacancy rate is just under 0.5%. Almost without exception, the increases are concentrated in the smallest cities and municipalities in rural areas, where they are now at an average rate of 1.9%.
Homeownership remains comparatively scarce
There is also a clear focus on the type of objects. As in the previous year, the increase in vacant units was entirely due to rental apartments. Instead of around 62,900, there are now 66,300, which corresponds to an increase of around 5.5%. The number of properties for sale remained constant at around 12,500. These figures reflect the trend over years of significantly more rental apartments being built in Switzerland than owner-occupied dwellings.
This trend is likely to become even more pronounced, at least in the medium term. Credit Suisse expects construction activity to decline in condos and single-family homes in the next two years. Based on four-quarter moving figures, building permits have dropped to a low here. The situation is different with rental apartments: According to the big bank, the environment of low interest rates ensures that developers prefer them to condos.
Just a brief corona effect
According to real estate experts at Credit Suisse, the corona pandemic will hardly change the trends described. In the first quarter of this year there was a sharp drop in building permits of 21%. In the second quarter, however, this was almost offset again, they write in a recently published study.
If you look at the four-quarter moving average, the dent in the permits is hardly noticeable. Over the next 6 to 18 months, Credit Suisse expects the stock of rental apartments to expand 1.1%. This value is even slightly higher than the one estimated by the bank a year ago (1.0%). Aside from large centers, rents in communities where relatively large numbers of buildings are being built could come under additional pressure.
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