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Sept. 15 (Bloomberg) -- Switzerland’s housing crunch is showing signs of letting up.
The vacancy rate has risen to the highest since 2001, the federal statistics office said today. As of June 1, 14 percent more Swiss homes were empty compared with a year earlier.
With strict zoning laws limiting construction, high immigration from the European Union has caused a shortage of places to live in cities such as Geneva and Zurich, pushing up prices. Frustration at the lack of affordable housing was a factor in Switzerland’s February vote to reduce immigration from the surrounding EU.
“It’s certainly a step in the right direction,” said Cornelia Luchsinger, an economist at Zuercher Kantonalbank in Zurich. “We’ve had lots of excess demand in recent years, and now the imbalance has diminished somewhat.”
The Lake Geneva region and Zurich were among the areas that experienced the proportionately biggest rise in vacancies, the data showed. Even so, finding an apartment in the city of Geneva remains tough, with a vacancy rate of just 0.39 percent, which compares with the national rate of 1.08 percent. If you’re single with a moderate income, securing a home is also more difficult: Country wide, there are more empty three- and four- room dwellings than ones with just one or two rooms.
Buoyed by high immigration, rents have risen faster than inflation in recent years. Between 2002 and 2013, rents in Geneva skyrocketed 88 percent, while in Zurich they jumped 50 percent, according to consultancy Wueest & Partner.
While the Swiss National Bank has tried to reduce housing market imbalances, its policies have targeted buyers and banks’ mortgage lending, even though most people in Switzerland don’t own their own homes. Just 37 percent of Swiss households are owners, compared with an average of roughly 60 percent in the EU, according to a report by local newswire SDA.
Swiss voters’ decision earlier this year to enact a quota system for newcomers from the EU, who in recent years have enjoyed free entry, is due to come into force by February 2017. Economists expect the restrictions to damp economic momentum.
Growth will be “jeopardized in the long term” due to a lack of immigration, economists at Credit Suisse Group AG said in a report published last week.
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