Insights into Zurich‘s housing market: key facts and figures

Canton of Zurich

According to the latest economic monitoring report by the Office of Economy and Labor (AWA), rents in the canton of Zurich have increased by 12% since 2005 while average incomes rose by 18%. This means that despite the rent increase, people in the canton of Zurich are not spending a higher proportion of their income on rent compared to 2005 (on average 22% of their household income). This may come as a surprise to many.

However, a closer look reveals major differences: New rental agreements are around 25% more expensive today than in 2005, whereas long-term rentals now even come with a 7% reduction (only for those who have lived there a long time though). The place of residence also plays an important role: in the city of Zurich rents - but also incomes - have risen more sharply since 2005 (+39% for new rents, +15% for existing rents) than in the surrounding areas.

Nevertheless, the overall situation on the housing market remains tense as demand for housing outweighs supply. Population growth and the shift towards smaller households are the primary factors driving increased demand. Notably, immigration has become less significant as a driver for housing demand in recent years.

Speeding up the construction and approval process and improving the regulatory framework, such as noise protection, would help to increase supply and alleviate the housing shortage.

City of Zurich

According to the latest vacancy census which determines the number of apartments that were neither rented nor sold as of June 1, the city of Zurich’s current vacancy rate is at an incredibly low 0.06%.

Reasons for this are low construction activity (esp. during Covid – the activity has now picked up again though) and especially the fact that the number of Zurich’s population disproportionately grew by June 2023, i.e. the already very low number of vacant apartments fell again.

The situation is particularly tense with new-build apartments. The census identified only 7 vacant new-build apartments (despite the fact that 2900 new flats had been built within a year - almost 1000 of them in the three months prior to the census). Such rapid absorption of new-build apartments, which accelerated again in 2023, is unusual. In terms of apartment size, the sharpest decline in vacancies in 2023 was in three-bedroom apartments. In contrast, the number of vacant large apartments with five rooms or more increased.