The Swiss rental market is under pressure: housing shortages, rising rents, increasingly vulnerable households… As a result, evictions for non-payment are skyrocketing in several cities. And the recent drop in the benchmark interest rate is not enough to reverse the trend. What are the implications for tenants and investors?
In 2024, the number of evictions related to unpaid rent increased significantly. In Lausanne, eviction requests rose from 103 in 2020 to 152 in 2024, an increase of approximately 50%. In Geneva, law enforcement agencies carried out more than 239 evictions in 2024. In Yverdon-les-Bains, 14 evictions had already been recorded by early 2025, exceeding the total for the previous year. (source: tdg.ch).
Although these evictions affect only a small proportion of the rental market (less than 0.2% of the 82,650 homes available in Lausanne), their steady increase reveals deep social divisions. This trend is part of a broader housing crisis, marked by rising rents, a shortage of affordable housing, and increasing precariousness among the middle and lower classes. As a result, access to stable housing is becoming increasingly difficult for vulnerable populations.
Housing supply still insufficient
This worrying trend is partly due to the chronic housing shortage, a key factor that is putting pressure on the rental market. In Geneva, as of June 1, 2024, the Cantonal Statistics Office (OCSTAT) reported a vacancy rate of only 0.46%, well below the 1% threshold generally considered to be an indicator of a balanced market.(source: tdg.ch).
Nationally, the situation is hardly any better: the vacancy rate stood at 1.08% during the same period, reflecting a very real shortage. Experts estimate that a balanced market would require a rate of around 1.27%. (source : wuestpartner.com). Under these circumstances, the prospects for rehousing vulnerable households remain severely limited, thereby exacerbating the risk of unpaid rent and evictions.
Rent relief, but limited impact on the crisis
Faced with this situation, the authorities attempted to take action by relaxing rental conditions. On March 3, 2025, the Federal Housing Office (FHO) lowered the reference interest rate from 1.75% to 1.50% in response to the easing of mortgage rates. This decision opens up the possibility of a legal rent reduction of 2.91%. In concrete terms, for a monthly rent of CHF 2,500, this would represent a gross reduction of CHF 72.75. After adjusting for inflation and maintenance costs, the net gain is around CHF 50 to 55 per month. (source: watson.ch).
However, this mechanism is not automatic: the request must be made in writing by the tenant and does not apply retroactively. Above all, this relief, while welcome, remains insufficient to reverse the trend in a market marked by structural imbalances. Until the supply of affordable housing is significantly increased, the reduction in rents will only partially alleviate the pressure on the most vulnerable households.
Implications for investors: a new paradigm to embrace
For real estate investors, this shift in the Swiss rental market calls for strategic adaptation. On the one hand, the rise in unpaid rent and evictions highlights the vulnerability of a growing number of tenant households. For private landlords and investors in condominiums (PPE), this translates into an increased risk of vacancy and additional costs related to collection procedures or property restoration.
In large cities such as Geneva, Lausanne, and Zurich, historically renowned for the stability of their rental markets, the situation now requires more refined tenant selection criteria and more proactive lease management.
At the same time, the drop in the benchmark interest rate is forcing many landlords to reduce certain rents. While the financial impact may seem limited (reductions of 2 to 3% on average), it comes on top of other pressures: rising maintenance costs, higher energy bills, and global economic uncertainty. This automatically reduces net returns, particularly for older or energy-intensive buildings, where margins are already tight.
For investors in participatory shareholding or real estate crowdfunding, these risks are partially mitigated through the pooling of rental income and rigorous selection of proposed projects. Nevertheless, it is crucial to target areas with high structural rental demand and to favor assets that are aligned with ESG standards (energy efficiency, sustainability) in order to secure the long-term value of portfolios.
Finally, the Swiss real estate market could enter a phase of stabilization, or even slight corrections, after more than a decade of sustained growth. Savvy investors will need to focus on geographic and typological diversification, closely monitor demographic and regulatory trends, and adopt a more active management approach to preserve their returns.
In conclusion, the Swiss rental market remains under significant pressure, with a persistent housing shortage and an increase in evictions. The recent reduction in the benchmark interest rate provides limited relief, insufficient to correct structural imbalances.
Beyond the legal aspects, evictions particularly affect vulnerable populations: single-parent families, seniors, and low-income households. Despite existing assistance, these measures remain insufficient given the scale of the challenge.
Greater mobilization of all stakeholders is therefore essential to prevent these situations and guarantee stable and dignified access to housing.
For investors, it is becoming crucial to adopt more selective and sustainable investment strategies. At the same time, public authorities and private actors must step up their efforts to increase the supply of affordable housing and limit the risks of exclusion.
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