What impact do migrants really have on the Swiss housing market?

The population of Switzerland has increased significantly in recent years, and population growth pushes up rents and house prices. However, according to a new study, migration is just one factor when it comes to the overheated housing market. 

Migration often blamed for overheated Swiss property market

High prices and limited supply are the norm for anyone looking to rent or buy a house in Switzerland. While the population of Switzerland is growing each year, housing supply is stagnating, 20 Minuten reports.

In political debates about the housing shortage in Switzerland, immigration is always brought to the table as a contributing factor. However, according to a new study by Wüest Partner, while immigration does indeed have an impact on both the rental and purchase markets, it is not the only factor at play. 

Immigration does push up house and apartment prices in Switzerland

Wüest Partner’s annual Immo-Monitoring report looked at the impact immigration in recent years has had on the Swiss real estate market, and found that immigration had led to an increase in demand for rental housing but also - indirectly - for owner-occupied housing. 

This is because new arrivals to Switzerland tend to live in major Swiss cities, close to where they work, and with good links to public transport and schools. Most migrants also live in rental accommodation, with purchase rates remaining low among newcomers - only 12,3 percent of newly-arrived migrants owned their own homes in 2023, compared to 44,1 percent of Swiss households. 

Interestingly, migrants also have smaller houses, occupying 1,4 rooms per person, on average, compared to 1,9 rooms for Swiss people. 

This all contributes to stimulating the rental market, increasing demand and pushing up prices, particularly in metropolitan areas. According to Wüest Partner, a 1 percent population increase pushes up rents by approximately 1 percent. 

It also has an indirect effect on the real estate market: pushed out by high rental prices, those who can are often choosing to buy, rather than rent, therefore stimulating the demand for owner-occupied houses, as well. Wüest Partner concluded that 1 percent population increase sees the cost of single-family homes rise by 0,88 percent and apartments by 1,37 percent. 

Immigration only one factor among many in real estate market

Robert Weinart, a housing expert at Wüest Partner, emphasised however that immigration is only “one factor among many” in price increases. As Blick reports, Weinart said that, "For owner-occupied housing, mortgage rates and economic growth, among others, are more decisive.” In the rental market, the benchmark interest rate and the vacancy rate also have a bigger impact on prices. 

"Migration certainly influences prices, but it's not the cause," Weinart concluded. He said it was par for the course for any country with a booming economy. "Ultimately, the housing shortage is a prosperity problem."