Real estate UBS expects rents to continue rising due to low vacancy rates

There are hardly any vacant rental apartments in Switzerland. Although the decline in vacancy rates has slowed this year, it is likely to continue next year, according to the major bank UBS. As a result, rents are expected to continue to rise.

As the Federal Statistical Office (FSO) announced this week, there were just under 52,000 vacant apartments across Switzerland at the beginning of June. This results in a vacancy rate of 1.08 percent, compared with 1.15 percent a year ago. As UBS now writes in an analysis on Friday, the vacancy rate is likely to fall further to around 1 percent in 2025.

Even if the momentum has slowed, the number of empty apartments is unlikely to bottom out in the coming quarters, UBS economists are convinced. Immigration has weakened only slightly at a very high level and the trend in building permits does not suggest a significant increase in housing production for the time being.

According to UBS, the increasing housing shortage will continue to drive the rise in rents. The economists estimate that asking rents will be 4% higher at the end of 2024 than in the previous year. And housing will continue to become much more expensive in the years to come. UBS expects rents to rise by 3 percent in 2025.

SDA