In this article, you will discover the main challenges of the housing crisis in Switzerland and Europe, its causes, and possible solutions.
Household structure and housing occupancy in Switzerland
The most common apartment size in Switzerland ranges from 4 to 4.5 rooms. Around 40% of the population live in dwellings with a living area between 71 and 110 m², of which nearly 20% fall between 71 and 90 m². On average, homeowners occupy dwellings with larger living spaces than tenants.
Two thirds of households in Switzerland consist of couples, particularly in the 36 to 55 age group. Between the ages of 18 and 35, housing arrangements are more evenly distributed, with comparable shares of couples with children (30%), single-person households (28%), and couples without children (24%). Among those aged 56 and over, nearly half of households consist of couples without children.
Thus, while larger dwellings remain particularly sought after by homeowners, demand is simultaneously increasing for smaller units, especially one-room apartments, among young adults and retired individuals who no longer live with children or as part of a couple.
The housing crisis in Switzerland
- high rents, particularly in urban areas;
- a vacancy rate close to zero.
Pressure on housing supply
The housing vacancy rate in Switzerland stands at 1%. A rate below 2% indicates a tight market; at 1%, available supply no longer meets demand.
This level means that the number of dwellings placed on the market is insufficient, both for rent and for sale. Demand exceeds housing construction, as current construction and market capacity are unable to restore equilibrium.
Regions under strong pressure
Some regions in Switzerland show vacancy rates below 0.5%, indicating that available supply is virtually non-existent. This situation primarily affects urban areas with a high concentration of jobs, where demand clearly exceeds the number of dwellings being built.
The lowest vacancy rates are mainly found in economic centers and border regions. In these areas, housing is scarce, expensive, and allocated very quickly after being placed on the market.
This imbalance is no longer limited to major cities. It now affects many medium-sized agglomerations as well as certain peripheral areas, indicating a shortage extending across the entire country.
Who is particularly affected by the crisis?
The shortage primarily affects family housing, especially apartments with 3 to 4 rooms. These are the most in-demand and least available properties, which severely limits relocation options for the households concerned.
This scarcity reduces residential mobility and constrains professional mobility, particularly in the case of a job change or a change in family circumstances.
The lack of housing suitable for families has direct effects on social and economic dynamics. It hampers internal mobility, complicates the settlement of newcomers, and makes residential stability more difficult to achieve. At the same time, pressure on rents is concentrated in the intermediate segments of the market, directly weighing on household purchasing power.
A housing crisis at the European level
The housing crisis does not affect Switzerland alone. It impacts the whole of Europe. In the European Union, around 1.3 million people are homeless, which is equivalent to twice the population of Luxembourg.
This situation is part of a context of sharply rising housing costs. Since 2010, property prices have increased by around 60% at the European level, while rents have risen by approximately 30%. Access to housing has thus become a source of insecurity for a growing share of the population. As summarized by Ursula von der Leyen, President of the European Commission: "For too many Europeans today, housing has become a source of anxiety."
Focus on the Netherlands
The Netherlands provide an instructive example for analyzing current imbalances in the European housing market. The country has a high share of social housing, accounting for around 30% of the total housing stock at the beginning of 2025. Despite this proportion, supply remains insufficient to meet demand.
Over the past decade, property prices have increased by around 100% nationwide, with rises of up to 130% in high-demand areas. The average annual income, estimated at 44,000 euros, no longer allows access to home ownership, as the average price of a dwelling exceeds 500,000 euros.
The rental market is subject to similar constraints. In July 2024, average rents increased by 5.4% year on year, marking the strongest rise observed in more than thirty years. The housing deficit is estimated at over 400,000 units. Access waiting times for social housing average seven years nationwide and reach 18 to 19 years in major cities, particularly in Amsterdam.
A housing crisis at the European level
1. Short-term rental regulation
In Brussels, the European Commission has drawn up a European housing strategy. According to a preliminary version of the plan, the European executive intends to propose a legislative framework aimed at regulating short-term rentals, especially those operated through platforms such as Airbnb.
The aim is to reduce the number of homes withdrawn from the housing market, especially in major cities, where these practices are associated with a reduction in the traditional rental supply and an increase in rents.
2. Increasing construction capacity
The strategy envisaged is based on two main levers:
reducing labour shortages, in particular through training and apprenticeship programmes in the construction trades;
adapting certain standards and procedures, in particular in the environmental and administrative fields, in order to shorten the time required to obtain building permits, without compromising long-term climate objectives.
According to estimates by the European Commission, Europe needs more than two million new homes per year to meet current demand and limit the persistence of imbalances in the housing market.
Possible causes of the crisis
Objection
This decline is due to a combination of economic constraints, particularly the high cost of land and the scarcity of available building land, and structural constraints linked to an administrative system that tends to multiply obstacles rather than facilitate the implementation of projects.
Appeals and objections play a role in protecting cultural heritage, the environment and the quality of life. However, the current framework allows anyone living within a radius of about 100 metres of a project to lodge an appeal, which has a direct impact on housing production.
The procedures are prolonged, construction sites are delayed, and costs increase over time. These additional costs are then passed on to rents or lead to the abandonment of certain projects, which exacerbates the existing shortage.
The right to appeal must be maintained, as it serves the public interest. However, its abuse should be limited, for example, by more precise admissibility criteria and proportionate fees.
The aim is to preserve the mechanisms of democratic control without blocking the construction of the housing needed by the community.
Autorisations
While a building permit could be granted relatively quickly about ten years ago, the deadlines have often doubled. What used to take a few months now takes several years.
Each additional year has concrete consequences: rents rise, some investors abandon their projects, and households remain longer on the waiting lists. Extending the procedures therefore directly contributes to the housing shortage.
This situation is not inevitable. Strengthening the human resources of the relevant services, better coordination between the administrations, and simplification of the individual steps could shorten the deadlines without weakening the legal or environmental requirements.
Demographic growth and economic attractiveness
Demographic growth, partly fuelled by labour migration from the European Union and third countries, increases the demand for housing.
This dynamic is concentrated in economically attractive urban centres such as Zurich, Geneva, Basel or Lausanne. In these regions, the population is growing faster than the housing supply, which intensifies the tensions on the market and contributes to an increase in rents.
Focus on the Netherlands
This development has an impact on the type of projects that are realised. It favours the construction of more expensive housing, aimed at households with high purchasing power, and contributes to the scarcity of affordable housing.
Even when housing construction is on the rise, it does not necessarily meet the needs of the households most affected by the shortage, which further exacerbates the imbalance between supply and demand.
Signs of localised overheating
In several urban areas, prices have reached levels that are incompatible with the income of average households. This is due to the pressure on the land market, the persistent scarcity of supply, and competition among investors who are supporting prices irrespective of affordability-related fundamentals.
Pricing is increasingly based on investment capacity rather than housing needs. This dynamic is exacerbating territorial and social inequalities.
The main risk is the emergence of a permanent housing divide, where access to housing depends on the ability to pay and on wealth, rather than on housing needs.
Possible solutions
Interest rate
In theory, this situation makes it easier to finance new projects and to access home ownership. However, in a context of housing shortages, this effect mainly affects demand.
If supply remains constrained, low interest rates are more likely to support prices than to improve access to housing. The monetary policy tool can therefore only be effective as a complement to measures aimed at expanding supply.
Social housing
In this context, certain organisations play a key role. For example, Places for People, a social enterprise based in London that operates throughout the United Kingdom, has issued bonds on a large scale to finance the construction of affordable housing and improve the energy efficiency of its real estate holdings.
This type of financing enables long-term private capital to be put at the service of social objectives while increasing the supply of accessible housing.
Social housing is therefore an instrument for the structural stabilisation of the market, particularly for households with low and middle incomes.
Partial separation between use value and investment value
Regulatory instruments can limit this tension, for example by regulating certain speculative uses or by promoting projects whose objective is to be housing-related in the long term.
The aim is not to abolish private investment, but to rebalance the incentives in favour of the use of new housing.
Conclusion
Various observations:
- housing production is hampered by land-related, administrative and legal constraints;
- demographic growth and the concentration of jobs increase pressure in urban centres;
- the conversion of housing into a financial asset exacerbates the scarcity of affordable housing;
- favourable monetary policies support demand without correcting supply rigidities.
In this context, an effective response requires coordinated action combining targeted regulation, speeding up procedures, expanding supply and developing housing forms that are not geared towards maximising returns.
Without structural corrections, the scarcity is likely to become permanent and inequalities in access to housing will increase.