St. Gallen has overtaken Biel / Bienne as the best city in Switzerland for affordable housing, a new analysis from Wüest Partner has found. They discovered that while other cities grapple with acute housing shortages and rising rents, the eastern city remains largely unaffected.

St. Gallen the new capital of affordable housing in Switzerland

According to their analysis, on average St. Gallen now offers the cheapest apartments to rent of all the 10 largest cities in Switzerland, having overtaken Biel / Bienne in Canton Bern, the city typically associated with affordable homes.

A four-room flat in St. Gallen now costs an average of 1.650 francs a month, less than half the average costs seen in Zurich. What’s more, unlike house viewings in places like Geneva and Basel, which attract hundreds if not thousands of applications, typically only 10 to 20 people apply for each home in St. Gallen.

The report comes as the housing shortage in other Swiss cities kicks into high gear. The Neue Zürcher Zeitung (NZZ) revealed that in recent weeks, 14.000 applications have been submitted for the 193 new apartments in the Tramdepot Hard development in Zurich. Demand was so high that city authorities were forced to create a lottery, which would select who be able to move forward with their application.

Why is St. Gallen such a cheap place to live?

When asked why St. Gallen is now the cheapest, Wüest Partner expert Robert Weinert explained that the city’s “below average economic development” is to blame. "In St. Gallen, fewer new jobs were created compared to other cities such as Biel or Winterthur."

Real estate expert Simon Hurt added that “since the decline of the textile industry, St. Gallen has not produced a dynamic industry.” While the city is known for its top university, few students choose to stay after graduating as it offers “fewer long-term prospects”.

In addition, St. Gallen is too far away from Zurich by public transport to be impacted by the city’s fast-growing economy and shortage of homes. Thanks to the high prices in the city, those who work in Zurich are increasingly looking at areas with cheaper housing costs and quick connections to the city, such as Schaffhausen, Frauenfeld and Aarau.

St. Gallen one of the slowest-growing Swiss cities

As a result of these factors, while Switzerland experiences record population growth, St. Gallen has experienced the second slowest rise in residents of the largest Swiss cities, only behind Lugano. Hurst noted that the local population only started to grow again in 2024, having stagnated for several years.

While the news makes the city an attractive prospect for those who want an affordable place to live in Switzerland, the situation is not warmly received by locals. Canton St. Gallen homeowners’ association president Walter Locher told the NZZ that St. Gallen is a “problem child”. He argued that the local authorities have to lower taxes and make the building approvals process more streamlined to attract more residents and jobs.