Swiss housing shortage stops many setting up home

Housing shortage is holding back household formation Keystone-SDA

Due to a lack of affordable housing, tens of thousands of people in Switzerland have put off setting up home independently.

This is a conservative estimate, as the property consultancy Wüest Partner explained in a study published on Thursday. If the housing market were less tight, as many as 40,000 to 50,000 additional households could be created.

Young adults are particularly affected. They are staying with their parents for longer or sharing a flat with others. In some cases, separated couples are also unable to afford a second home.

The housing shortage is also leading to a shift in demand towards more affordable regions. As a result, the canton of Zurich is now losing a net total of around 3,500 residents a year to other cantons, particularly Aargau, Thurgau and Schaffhausen. Before the pandemic, Zurich had been gaining around 1,850 people a year from other cantons.

This trend is particularly evident among young adults. The annual net inflow of 15- to 34-year-olds from other cantons to Zurich has halved to around 2,750 people compared with the pre-pandemic period. At the same time, the proportion of young adults living alone has been falling since 2022, particularly in Zurich, Schwyz and Zug.

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More new-builds offer little relief

Despite the upturn in construction activity, there is no sign of the situation easing for the time being. Wüest Partner forecasts a net increase of around 45,000 flats by 2026, rising to around 50,000 by 2027.

This means more flats are being built than the approximately 40,000 new households formed annually in recent years But the additional supply is also likely to enable people who have so far postponed setting up a household to do so, thereby triggering new demand.

Consequently, pressure on rents remains high. In the third quarter of 2026, advertised rents across Switzerland were 1.9% higher than the previous year’s level. This was despite the number of rental flats advertised reaching its highest level since early 2024.

The city of Zurich is an exception, where asking rents fell by 1.7%. According to Wüest Partner, this could indicate that a price threshold has been reached which is now barely affordable for many households.

For 2027, property experts anticipate a further rise in asking rents across Switzerland of 0.9%. Rents for existing tenancies, however, are likely to remain stable.

Prices for owner-occupied property are also continuing to rise. In the third quarter, flats cost 5% more than a year earlier, whilst detached houses rose in price by 3.2%. For 2027, Wüest Partner expects further price rises of 3.5% and 3.1% respectively.

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Translated from German, reviewed by an English Department journalist.