The COVID-19 pandemic has changed living and working habits dramatically, a dynamic that is playing out in the rental market and taking particular effect on second homes, according to Fredy Hasenmaile, who heads Credit Suisse’s real estate economics team.

«The blurring of the boundaries between living and working, digital and analogue, and city and country are resulting in a shift of demand toward less central locations and larger apartments,» he writes.

In their «Swiss Real Estate Market 2022, analysis» the economists write that cities in particular are losing their appeal resulting in a blurring of the line between places of residence and work is stimulating a re-evaluation of individual housing situations, changing priorities, and increasing the search radius of home-seekers.

Cities

Switzerland's largest cities which for years have experienced low vacancy rates, have experienced no population growth in the past two years. International immigration into the cities is being offset by accentuated domestic migration out of them. 

In fact, the trend of urbanization is likely to slow over the long term, bringing relief to the scarcity of housing in the large cities, they write.

Second Homes

The market for second homes, battered by an initiative in 2020 which limited construction of second homes in municipalities to 20 percent of overall houses, was revived by the pandemic. 

Over the last two years, many Swiss have (re)discovered the appeal of taking a vacation in a country that people come from around the world to visit. Indeed, the trend of acquiring a vacation home is being driven by remote working models, which can be combined very well with second homes. Moreover, with interest rates in negative territory, that money can instead be put to work in real estate.

As the saying goes, when one door closes, another one opens. In this case it might be a remote worker closing his or her apartment door in Zurich and opening the door to their home office in the mountains.