Wachstumsdruck verlagert Nachfrage in Schweizer Vorstadtregionen

Switzerland’s housing shortage continues to intensify. The national vacancy rate fell to 1.15 percent in 2024, according to the Federal Statistical Office, while the population reached 9’051’000. With demand outpacing annual construction by an estimated 10’000 to 15’000 units, more households and companies are turning to suburban municipalities around the major centres. These areas still offer development capacity and efficient transport links at a time when central markets are defined by scarcity.

Demographic Trends Reshape Demand Patterns

Net immigration reached 116’000 people in 2024, the highest level since 2022 and a continuation of the long-term population trend. The Federal Statistical Office expects Switzerland to surpass 10 Mio. inhabitants between 2033 and 2043, with its reference scenario indicating around 10.5 Mio. residents by 2055. Population growth is concentrated in the metropolitan regions, which continue to attract both domestic and foreign labour.

Demand is reinforced by the decline in household size. Switzerland has roughly 4.1 Mio. households today; the number is projected to reach between 4.3 Mio. and 5.4 Mio. by 2055. Smaller households increase the number of required dwellings for a steady population. Market studies estimate that more than 522’000 additional homes will be necessary by 2040. The combination of demographic expansion and household fragmentation intensifies pressure on markets already near full capacity.

Cities Confront Structural Constraints

Major cities cannot expand housing supply at the pace required to meet demand. Building permits for residential projects fell by 11 percent in 2023, extending a multi-year decline in planned construction volume. Roughly 45’000 new dwellings were completed in the same year, well below the estimated need of 55’000 to 60’000 units. UBS expects a cumulative shortage of 50’000 to 80’000 homes by 2027 if output remains unchanged.

Constraints are embedded in the planning system. Densification is contentious in established neighbourhoods, where changes in height, density or land use frequently face resistance. Approval procedures are lengthy and allow for objections at several stages, creating uncertainty around project delivery. Even approved developments are often scaled back. As a result, central municipalities cannot generate the volumes required to stabilise vacancy rates or accommodate long-term household formation.

Vacancy Data Shows Broad Market Tightness

Vacancy data illustrates the consequences of limited supply. The national vacancy rate of 1.15 percent in 2024 marked a decade low. Zurich recorded 0.7 percent, Geneva 0.6 percent and Zug 0.4 percent. Markets with below-equilibrium vacancy levels of roughly 1.5 percent typically experience faster rent growth and reduced tenant turnover. Asking rents rose by more than 6 percent in 2023, according to the Homegate Index, and continued to increase in 2024 as the reference interest rate climbed from 1.25 to 1.50 percent and later to 1.75 percent.

With limited choice inside the major cities, households increasingly consider suburban locations. Lower price levels, larger units and dependable public transport connections broaden the radius of viable housing options. The shift, which began as a response to scarcity, now forms part of a wider redistribution of demand across metropolitan regions.

Migration Flows Support Suburban Expansion

Internal migration confirms this trend. Zurich City recorded net departures of around 6’000 residents in 2022–2023, while municipalities in the surrounding agglomeration gained roughly 5’500 residents. Similar patterns are visible in the Geneva and Basel regions, where population growth is increasingly absorbed outside the core municipalities. Suburban areas benefit from improved transport connections and more accessible housing supply, creating a stable alternative for residents and firms.

These demographic shifts strengthen suburban economies. Population growth stabilises local services and retail turnover, and rising demand justifies ongoing investment in public transport and community infrastructure. Over time, suburban municipalities evolve from commuter zones to autonomous regional markets with their own demand cycles.

Commercial Real Estate Adjusts to New Conditions

Commercial property markets reflect the same adjustment. Zurich’s office vacancy rate fell from 5.0 percent in 2020 to 3.4 percent in 2024, according to JLL. Much of the improvement occurred in suburban locations along major transport corridors, where firms can secure flexible layouts and lower occupancy costs. The rise of hybrid work has reduced the premium placed on central-business-district locations, prompting companies to consider locations with broader catchment areas.

Retail markets follow a similar trajectory. GfK Switzerland reports an 8 percent increase in footfall in suburban retail parks between 2019 and 2023, in contrast to more subdued movement in some inner-city shopping areas. Growing suburban populations and sustained demand for convenience and service-oriented retail underpin the resilience of these centres.

Listed Real Estate Funds Reflect the Market Shift

Valuations in listed property funds underscore the emerging importance of suburban markets. Several Swiss real estate funds trade at discounts of 10 to 15 percent to net asset value, according to Swiss Fund Data and Zürcher Kantonalbank Research. These discounts are driven largely by interest-rate conditions rather than asset-specific challenges. For investors, they offer opportunities to access diversified portfolios with exposure to suburban residential and commercial stock at below-asset pricing.

Income structures remain broadly stable. Residential rents are indexed to the reference interest rate, while many commercial leases include consumer price index clauses. These mechanisms help preserve real rental income at a time of rising operating and financing costs and further support the investment case for assets with dependable tenant demand.

Suburban Regions Gain Strategic Importance

The interaction of demographic growth, planning limitations, falling vacancy rates and persistent migration into suburban municipalities is reshaping Switzerland’s real estate landscape. Suburban regions now form an essential part of national housing and commercial capacity rather than serving solely as extensions of the major cities. Their development potential, transport connectivity and more predictable planning conditions position them as central to meeting future demand.

For investors, this rebalancing is increasingly relevant. Suburban markets offer stable fundamentals and the flexibility that many central locations currently lack. As the population continues to expand and planning constraints in the cities persist, suburban regions will play an important role in shaping returns and guiding long-term allocation decisions in Swiss real estate.