The virus puts pressure on supply
An unexpected consequence of COVID-19: the Federal Statistical Office reports a 9.5% drop in the supply of vacant homes across all Swiss cantons. Several factors explain this. On one hand, the various restrictions linked to lockdowns forced construction companies to slow the sustained pace that had kept vacancy rates high. Material shortages compelled builders to scale back even when their order books were full. On the other hand, health measures requiring smaller teams on site forced companies to spread projects over longer periods. Even though this situation is unprecedented, professionals are not overly alarmed. Most consider it a cyclical phenomenon and expect the trend to be short-lived. In German-speaking Switzerland, as well as in the cantons of Fribourg, Vaud, and Geneva, construction activity has already resumed at a strong pace, with many projects currently underway.
What will remain of the pandemic
While this sudden contraction in supply will likely fade from memory, demand has undergone deeper and more lasting changes. The public’s housing expectations have shifted significantly. First observation: tenants are increasingly looking for larger living spaces. This is a direct consequence of widespread remote working, which has created the need for a dedicated home office in many households. Second change: proximity to the workplace is becoming a less decisive criterion, while overall quality of life is gaining prominence. As a result, pressure on major city centres is easing in favour of smaller towns and peri-urban or rural areas. The enthusiasm for larger, more comfortable, and multifunctional homes is therefore expected to remain a defining feature of the real estate landscape for the years ahead.
