The problem of empty housing, particularly in the urban periphery, is likely to worsen, with construction activity concentrated in areas with already high vacancy rates. Last year around 59,700 homes did not have any tenants. The bank expects the number to increase to 72,000 in 2020.
Despite continued high demand in urban centres, it has become more difficult to build in cities such as Zurich, Basel or Geneva. This has prompted investors to divert their construction projects to the periphery.
Overall, the construction of housing in Switzerland is stagnating. Last year, the authorities issued significantly fewer building permits for rental units. In 2018, building permits for rental apartments fell by 7%. In the fourth quarter alone, the decline was as high as 20%.
Zurich Cantonal Bank expects the construction of rental apartments to fall from 53,900 last year to 52,600 this year and 50,400 in 2020.
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Parliament has agreed a change to the law aimed at reducing the land area that can be developed. It comes in response to a people’s initiative demanding a 20-year building freeze. There was much debate about construction in mountain areas in the run-up to the March 11 vote on a second homes initiative, which was…
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