Swiss housing shortage one of the most severe in Europe, study finds

Switzerland has been ranked as having the fourth worst housing shortage in Europe, according to a new analysis from real estate consultancy Wüest Partner. Experts noted that a mixture of rising demand and a lack of construction has led to skyrocketing rents across Switzerland and the rest of the continent.

Switzerland has one of Europe's worst housing shortages

To create the study, Wüest Partner rated 28 European countries by the severity of their housing shortages. They did this through 14 different factors, ranging from the cost of renting a house or apartment compared to average salaries, to rates of construction and the number of homes per resident.

The study found that Switzerland has the fourth-worst shortage in Europe, behind Luxembourg, Ireland and Norway. Though comparatively more houses are being built in Luxembourg compared to the alpine nation, the country has the smallest number of homes per 1.000 residents at just 388.

Rental homes in Switzerland are expensive and hard to find, study says

In Switzerland’s case, while there are 534 homes per 1.000 residents, in the last two years just 4,9 new dwellings have been built per 1.000 people, one of the lowest rates in Europe. Though average rental costs have only risen by 5,6 percent in the last two years - far behind the likes of Ireland (22 percent), Romania (22,1 percent) and Hungary (25,4 percent) - the ratio of rental costs to income is one of the worst on the continent.

Unlike larger countries like the United Kingdom and Germany, whose housing shortages have been concentrated in major cities, Switzerland’s housing shortage is nationwide. "The ranking shows that small countries, in particular, can quickly face a housing shortage," Wüest Partner expert Robert Weinert told Blick, "Especially if they are performing well economically."

Housing supply fails to keep up with rising demand

For Weinert, the Swiss housing market has worsened due to two factors. First, the number of new homes being built in Switzerland has dropped by 27 percent in the last five years, and has only started to pick up recently.

Second, the population of Switzerland has increased by 1 million people between 2012 and 2024. Rather than through an increase in births - which does not contribute to the housing demand in the short term, the Federal Statistical Office noted back in 2024 that migration is now responsible for 95 percent of population growth. 

These new arrivals come to fill jobs in Switzerland and help ease the ongoing worker shortages. However, construction has failed to keep up with demand, leading to acute shortages in the cities most popular with expats like Zurich and Geneva.

How is Europe tackling the housing crisis?

Wüest Partner noted that countries across Europe are adopting various solutions to the problem - from digitising services and approvals processes in Germany, to higher investment in affordable and social housing in countries like France and the United Kingdom. Because of a lack of space for new settlements, most of Switzerland’s efforts have involved programmes to densify neighbourhoods by building taller and using more brownfield sites.

For Weinert, the housing crisis must be solved through more construction and fewer restrictions on new projects. “Where necessary, we need to build more vertically, since we can no longer build wider…This is the only way to create more supply," he concluded.

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