Switzerland is a country known for its beautiful landscapes, high-quality of life, and strong economy. However, in recent years, the country has been facing a growing housing crisis that has been affecting both its citizens and foreigners who wish to live and work there.

One of the main causes of this housing crisis is the delay in obtaining permits. Many foreigners who move to Switzerland for work or study find it difficult to obtain a permit, which is essential for renting or buying a property. This delay often leads to a shortage of available properties, and prices are pushed up due to the high demand.

The steadily growing population of Switzerland, currently at 8.7 million, is another factor contributing to the housing crisis. With more people requiring housing, the demand for properties has increased significantly. Unfortunately, this demand has not been met with an equal supply of new apartments and houses being built, leading to a shortage of affordable housing options.

Switzerland is heading towards its biggest housing shortage in 30 years, according to the NZZ. Keystone / Steffen Schmidt

Another trend that is contributing to the housing crisis in Switzerland is the preference for smaller properties. Many people, especially millennials and young families, prefer to live in smaller apartments or houses, which are more affordable and easier to maintain. However, there is currently an insufficient number of smaller properties available, making it difficult for people to find a home that meets their needs and budget.

The shortage of new apartments and houses being built is also contributing to the housing crisis in Switzerland. While there is some construction happening, it is not enough to meet the growing demand for housing. Additionally, the cost of construction has increased, making it more expensive for developers to build new properties.

The problem is being caused by a combination of factors: a steadily growing population (currently 8.7 million), a trend towards smaller properties and an insufficient number of new apartments and houses being built – building permits have fallen to a 25-year low.

Switzerland is heading towards its biggest housing shortage in 30 years, according to the NZZ.

The immediate result is rising housing costs for tenants, NZZ says. Although rental increases are capped by law, the shortage is driving up rents. Higher tenancy agreements are only contested on rare occasions.

Switzerland has one of the lowest home ownership rates among the richest economies. Only around 40% of people own their own properties while the rest rent. This makes Switzerland an exception as the proportion of homeowners in Europe is routinely around two-thirds or more. 

Swiss tenants are protected by laws that restrict large rental increases, but increasing demand for apartments, especially in cities, continues to drive up rents.

In municipalities with a vacancy rate of more than 2.5%, building applications are a quarter lower than in 2019. But even in municipalities with a shortage of rental housing, fewer flats are planned, it said.

According to the ZKB, the general building conditions also pose a major problem. “Everyone is in favour of [more houses], but not on their own doorstep. As a result, the construction of new houses has become full of hurdles,” it said.