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There is currently much discussion about developments in the local real-estate and rental housing markets. This article adds to the debate by classifying the Swiss construction sector during the current period of upheaval.

An economic stimulus package launched by the EU Commission is intended to revive Europe’s economy in the wake of the COVID-19 pandemic and, at the same time, modernise its infrastructure. But acute problems in the construction market as well as local planning restrictions could reduce the programme’s impact.

The business situation in the Swiss construction sector deteriorated sharply in April. Construction site closures in parts of Switzerland and hygiene regulations are delaying ongoing construction projects. KOF expects construction investment to decline by 2.0 per cent in real terms in 2020.

Most Swiss people rent their home rather than buy an apartment or house during their lifetime. Only 38% of Swiss households are homeowners – the lowest homeownership ratio in Europe. Furthermore, only a fifth of the housing stock are single family dwellings – with a declining trend. The reasons behind these low figures are both structural and cyclical.