Supply and demand – the only true powers that determine everything in a market economy. That they do not always work in favour of ordinary people is evident from the real estate market in Switzerland. Especially in the metropolises, like Basel. Exploding prices and unaffordable rents. That is the state of affairs. Will it always be like this, or is there also a tendency in the other direction?
Why are property prices rising in Basel?
There are currently about 8 million people living in Switzerland. About 2 million of them have immigrated in the last 10-20 years. Most of them from the EU. They were allowed to do this because we have an agreement with the EU countries on the free movement of persons. These immigrants have not burdened the Swiss labour market, they enrich it. Because 2 million additional people contribute to GDP, which drives our prosperity. The only problem with this is that the expansion of housing opportunities does not work quite as flexibly as the labour market. A move is quickly made. But a block of 500 new flats takes months to years. Massively increased demand – no supply to compensate quickly enough – that inevitably leads to rising prices.
What to do about expensive rents?
Of course, most jobs are in the country’s metropolises. And of course every worker would like to live close to work. But with current prices, this becomes a financial feat. Therefore, the first solution would be to look around in the surrounding area. If you look for real estate Muttenz, you will notice that in this suburb of Basel the prices are already somewhat lower than in the centre. The further out it goes, the cheaper it gets. No reason for commuters to be happy, but in times of home offices at least a small saving.
Another option would be to forego the luxury of living alone. Perhaps it is possible to share a flat with others in order to establish yourself. Or to build up reserves for a larger property.
Will prices come down again at some point?
It’s possible, but it will take time. Increased demand naturally leads to companies seeing the opportunity to earn good money. For this reason, countless plots of land have been bought up in the conurbations. Every free square metre is built up with housing. Where more flats are being built in good locations, the market for rents should actually relax. But the question remains whether the influx of immigrants will continue to outpace the expansion of housing opportunities.
Furthermore, building materials have become much more expensive in recent years. In addition, stricter environmental regulations in building requirements have led to a massive increase in the cost of a building. These costs are then passed on to the customers through the rents or the sales prices.
Consequently, things will probably not get much better in the conurbations.