SWISS RESIDENTIAL MARKET

Agglomeration Vacancy Net rents purchase prices
price band
CHF/m² p.a.
price band
CHF/m²
Aarau 3.3 % 160-275 4 665 - 9 230
Baden-Brugg 2.1 % 170-310 5 385 - 10 000
Basel 1.3 % 180-320 4 635 - 11 250
Bern 1.2 % 170-315 4 570 - 9 885
Biel 3.0 % 155-240 3 925 - 7 860
Chur 1.4 % 165-290 4 220 - 8 720
Fribourg 2.1 % 165-315 4 615 - 8 060
Geneva 0.6 % 270-575 7 335 - 18 125
Lausanne 1.0 % 220-425 5 930 - 12 945
Lugano 2.7 % 165-340 4 610 - 13 205
Lucerne 1.4 % 180-345 6 140 - 13 940
Neuchâtel 1.5 % 170-285 4 415 - 8 385
Olten-Zofingen 3.8 % 150-245 3 780 - 7 910
Schaffhausen 1.8 % 140-250 4 320 - 8 280
Solothurn 2.9 % 145-250 3 800 - 7 100
St. Gallen 2.5 % 145-260 4 185 - 8 515
Thun 0.9 % 170-270 4 670 - 9 680
Winterthur 0.6 % 190-335 6 020 - 10 945
Zug 0.7 % 200-460 8 005 - 15 595
Zurich 1.0 % 195-500 6 215 - 14 390

On the residential market, tenants and owners have spent a lot more time at home as a result of the pandemic and the shift to working from home. The value of a beautiful home rose. This mainly benefited the owner-occupied segment, with demand well outpacing supply in 2020. In the rental segment, new construction in well-developed locations was quickly absorbed. Furthermore, many households expanded their search radius, as a large number of people expect to be able to work from home in future. This trend was especially clear in the owner-occupied segment, with private outdoor space and plenty of sunlight becoming particularly important. Those who can afford it also tend to want an extra bedroom. The pandemic has had a noticeable impact on willingness to pay and affordability. A broad segment of the population no longer wants or is able to pay the asking rent or purchase price. In the still tense residential markets in city centres in particular, dream apartments are not within reach for many. In such locations, there continues to be substantial willingness to make compromises for an affordable apartment.

Things are quite different outside the major centres: high vacancy rates above 2% or even 3% are not uncommon. This excess supply is putting particular pressure on existing older properties and the upper price segment. Despite the decline in construction activity, a trend reversal in the rental apartment market is once again unlikely in 2021. The Swiss vacancy rate of 1.72% rose further in 2020 compared with the previous year and should climb again in 2021. With the exception of centres, rents will probably fall further. In the owner-occupied segment, by contrast, prices are expected to increase again, in particular for single family houses. Due to the desire to own property and changed housing needs, the number of potential buyers is likely to increase in 2021. However, they will continue to find limited supply.


 
"There was sharp variation at all levels of the residential market in the greater Zurich area, both in terms of location and home requirements. The owner-occupied market is booming, while the rental market appears to have stalled somewhat."
Annica Anna Pohl
Head of Property Marketing
"In contrast to agglomeration locations, renters in Zurich are prepared to make major compromises; an extra room in order to be able to work from home is less of an issue, as long as the rent remains affordable. We have seen a sharp rise in price sensitivity in the city of Zurich."
Andrea Bülow
Marketer Investment Properties, Commercial Properties & Tenant Representation, Team Leader Residential Sales