Vacancy rate in Switzerland — importance of the vacancy rate for investors
What is the vacancy rate? - The definition
In the real estate sector, the term means Vacancy unused or unleased space in buildings that may be privately or publicly owned. The Swiss Federal Statistical Office (FSO) records the vacancy rates of apartments and houses in the country every year. A property is considered vacant if it is offered as permanently available for rent or purchase as of June 1 of each year, regardless of whether it is furnished or not. Vacant holiday apartments or second homes that are to be rented out for at least three months also fall under this definition.
Development of the vacancy rate in Switzerland
The BFS surveys in June 2024 show that 51'974 apartments and single-family houses stood empty, representing a share of 1.08% corresponds to the entire residential stock. This figure represents a decline of 5.1% compared to the previous year, which was observed for the third time in a row. The vacancy rate of rental apartments fell by 8.6%, while condominiums were increasingly offered for sale, the vacancy rate rose by 9.5%.
The canton of Zug has particularly low vacancy rates at 0.39%, while the canton of Jura has the highest rate at 2.98%. Compared to 2023, all cantons with the exception of a few, including Zurich and Geneva, are showing a falling vacancy rate, as a result of increased demand for housing. You can find more information about the vacancy rate here: https://www.bfs.admin.ch/bfs/de/home/statistiken/kataloge-datenbanken.gnpdetail.2024-0359.html
What does the vacancy rate mean for investors?
The vacancy rate is an important indicator for investors as it provides information about market conditions and potential risks on the earnings side. In cantons with low vacancy rates, such as Zurich or Zug, housing is scarce and sought after, meaning that apartments can be rented out.
In regions with higher vacancy rates, such as Jura, landlords often have to offer incentives to attract tenants, for example through free rental months or shopping discounts.
tip: Real estate investors should obtain detailed information about the vacancy situation and market developments in the region before making a purchase in order to be able to make well-founded decisions. The vacancy risk should be priced in at least in the same way as the cantonal vacancy rate by deducting the percentage from the net rent interest in the financial model
Factors for a well-founded investment decision
Regional differences
The vacancy rate can vary significantly within a canton. In addition to cantonal averages, investors should therefore obtain more specific, regional data.
Rental price development
In regions with low vacancy rates and high demand, rental prices tend to rise, which can have a positive impact on potential returns. An overview of rental price developments can be helpful in realistically assessing return prospects.
Construction activity and planned projects
New construction projects or a high level of construction activity can increase the supply of rental properties and thus influence the vacancy rate. If a lot of construction is done in a region, this generally reduces the rents of the existing building.
population development
Sustained population growth increases demand for housing and can lead to falling vacancy rates. A focus on growing regions is beneficial for investors, both for the rentability and for the performance of the property.
Economic indicators
The economic situation of a region can also influence real estate demand. Regions with positive economic forecasts and stable labor market data offer potentially secure investment opportunities.
Legal and tax framework
Laws and tax regulations can have a significant impact on real estate investments. Find out whether the location of an interesting property has a real estate tax or a real estate gains tax.
By taking these factors into account, investors can conduct a comprehensive analysis of the real estate market in Switzerland and make well-founded decisions that minimize risk.
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