Housing market The canton of Zurich would need 7600 new apartments a year by 2040

There is still a housing shortage in the canton of Zurich. And the outlook is bleak: according to a recent analysis, around 7,600 apartments would have to be built every year until 2040 in order to cope with the expected household growth.

In the past two years, however, residential construction activity has been far below this figure, as the Zurich Office of Economic Affairs announced on Wednesday. In order to combat the housing shortage, solutions are needed that stimulate construction activity, increase the supply of housing and thus curb rental and purchase prices, according to Economic Director Carmen Walker Späh (FDP).

According to the latest analysis by the Economic Policy Unit, too few apartments are still being built to keep pace with household growth. This shortage is having an impact above all on asking rents, i.e. when moving into a new apartment.

After a long period of stagnation, asking rents in the canton of Zurich have risen sharply since 2022, according to the press release. This means that anyone looking for a new apartment today will pay 20 percent more for a similar property than around 14 years ago, it says. However, incomes have also risen significantly in recent years.

Existing tenancies hardly affected

According to the analysis, existing tenancies are hardly affected by the current housing shortage. As the reference interest rate was reduced from 3.5 percent to 1.25 percent between 2008 and 2022, many tenants were able to benefit from a rent reduction. Those who have lived in the same apartment since 2010 paid less rent at the end of 2023 than when they moved in, according to the press release.

The vacancy rate in the canton of Zurich has almost halved since 2019, according to the press release. Nevertheless, at 0.56 percent, it is still a far cry from the figure of 0.09 percent at the beginning of the 1990s. According to the analysis, there are strong regional differences: While the vacancy rate in the city of Zurich is 0.07 percent, it is 1.84 percent in Uster.