Real estate experts warn Switzerland unprepared for population boom

The Swiss population is expected to reach the 10 million mark in the coming decades. Will there be enough space? © Keystone / Alessandro Della Valle

The Swiss population in 2023 is expected to increase by much more than official statistics predicted, argue some real estate experts. This leaves the country ill prepared to deal with a surge in housing demand, they say.

“The problems start with the fact that the official population forecasts are constantly too low,” Hans Holdener, CEO of Helvetica Property Group, told the NZZMagazinExternal link.

Real estate consulting firm Wüest Partner predicts that the population in Switzerland will increase by a record 148,000 in 2023. This is significantly higher than the increase of 70,000 people estimated by the Federal Statistical Office (FSO) in its reference scenario.

In response to an NZZ request, the statistical office said that the effects of the Covid-19 pandemic and the war in Ukraine are difficult to predict.

According to the Wüest Partner firm’s model, the main growth driver is the labour market. It forecasts net immigration of 91,000 workers based on a 2%  growth in employment.

The real estate firm also predicts that around 48,000 people from Ukraine will be added to the resident population. After 12 months residence in Switzerland, people with protection status S, which includes Ukrainians who fled the war, are officially counted as part of the permanent resident population of Switzerland. A birth surplus of 8,000 people also contributes to a small part of the growth.

+Immigration spurred Swiss population growth in 2022

Last year, Switzerland’s population increased by 55,000 households or 74,000 people to reach around 8.8 million. This figure doesn’t include refugees and asylum seekers.

Housing crunch

The real estate experts say that housing construction is not keeping apace with population. Based on the Wüest forecasts, an estimated 90,000-100,000 additional apartments would have to be created.

Incorrect forecasts are partly to blame. In 2010, the statistical office predicted that Switzerland would reach the threshold of 8.9 million inhabitants by 2055 but the country has already eclipsed these predictions. Holdener expects Switzerland will reach the 10 million mark in 10 years, not by 2040 as officials predict.

+Switzerland could hit the nine million population mark

“That plays a decisive role in the fact that we are notoriously building too few apartments and there is a shortage,” said Holdener, who adds that Switzerland risks become the new Monaco with extremely high rents and real estate prices. In Monaco,  apartments in a good location cost at least twice as much as the most exclusive luxury apartments in the Swiss resort towns of St. Moritz or Gstaad.

The real estate experts argue that Switzerland needs to boost investment and improve conditions, including zoning laws, to allow for more construction.