ZURICH. Advertised rents in the city of Zurich rose 4.1 per cent over the past year, the fastest increase since 2017, according to the quarterly survey published on Wednesday by the real estate consultancy Wuest Partner. Vacancy in the city stands at 0.07 per cent, a figure that leaves almost no slack in the market and that has now held below 0.1 per cent for three consecutive years.
The acceleration is concentrated in smaller apartments. One and two bedroom flats, the stock that young professionals and incoming workers actually compete for, rose 5.3 per cent. Larger family apartments rose 2.8 per cent, held down by longer tenancies and by the legal limits on how far an existing rent can be raised when a contract is renewed.
Asking rents are not the same as the rents people actually pay. Existing tenants are protected by the reference interest rate, which has been falling, and by a court practice that treats large increases as abusive. The gap between advertised rents and sitting rents has never been wider, which is another way of saying that the people who move are the people who pay.
Immigration is the demand side of the story. Net migration into the canton ran at roughly 12,000 people last year, most of them drawn by jobs in finance, technology and the public sector. Completions of new apartments ran at 2,400, a number that has barely moved in five years. The arithmetic is not complicated.
The political fight over household costs has, until now, been a fight about health premiums. The Wuest figures will give that fight a second front. A motion in the city parliament, already tabled by the left, would extend the city's pre-emption rights on apartment buildings coming to market, a tool currently used sparingly. The property lobby calls it a step toward a planned housing market.
Cantonal officials point to zoning. Large parts of the city remain reserved for low density housing, and attempts to raise building heights along the tram corridors have been blocked, commune by commune, by residents who already have a roof. The tension is the oldest in Swiss urban politics: the people who vote are not the people who need to move in.
Neighbouring districts tell a milder version of the same story. Winterthur, Dietikon and the Glattal all recorded increases between 2 and 3 per cent. Rapperswil-Jona, thirty minutes down the lake, was the exception: asking rents there fell slightly, as a wave of completions finally caught up with demand.
Housing economists have been warning about this combination, tight vacancy plus steady immigration plus slow building, for most of the decade. “The premium letter is loud. The rent increase is quieter, and it lasts longer,” a researcher at the Swiss Federal Institute of Technology said.
The next data point is the federal housing vacancy survey, due in November, which will show whether the city's figure is an outlier or a leading indicator. On present trends, it is the latter. The apartments that will ease the pressure are the ones that have not yet been permitted, and the permits that would produce them are the ones that take the longest to grant.