Swiss tenants face steep rent increases in the coming years. According to Martin Tschirren, head of the Federal Housing Office, advertised rents are likely to climb by 3–5% annually. Demand for housing continues to outstrip supply, he told the NZZ am Sonntag on 25 August 2025, as his office released its latest housing market data.
The shortage recalls the crunch of 2014, when vacancies fell to historic lows. Today, too, the supply of new housing is shrinking. Building permits have dropped by nearly a third since 2016, Tschirren notes.
Construction activity has not yet fallen as sharply, but is expected to do so. Opposition and legal appeals are the main culprits behind stalled projects, according to a study he cited. The report suggests restricting the right to appeal to those directly affected, while keeping consultation rights in place. This would curb opportunistic obstruction.
Two deeper forces are also at work. Housing has become an attractive investment, driving prices higher. And unlike in the past, municipalities can no longer solve rising demand by simply re-zoning land—available plots are too scarce.
Switzerland’s Spatial Planning Act, which was voted in by referendum, sets the rules for how land may be used and developed. Its aim is to ensure that settlements grow in a compact, orderly way, farmland and natural landscapes are protected, and infrastructure is used efficiently. In doing so it restricts re-zoning land to construct buildings. The law was adopted by Parliament in 1979 and approved by voters in a referendum on June 22nd 1980. Since then various reforms have tightened rules on zoning and land reserves – link to the law here (in French).
Unless the economy stumbles, tenants entering the Swiss housing market and those moving within it should brace for higher rent.
More on this:
FHO press release (in French) – Take a 5 minute French test now
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