The Swiss real estate sector is viewed with suspicion in some places – especially when it comes to the housing market. Is there enough living space in central locations? Why are rents in metropolitan regions rising sharply and constantly? What influence do municipalities, cantons and the federal government have on the activities of the institutional real estate industry? And what voice does the sector speak with throughout the country?
The professional, institutional and commercial real estate industry is undoubtedly under observation. It is undoubtedly caught between growing regulation, social change and, in many places, calls for innovation, renewal and fairness. The minds and planners of the 25th symposium of the Group of 15, the think tank of the Swiss real estate industry founded in 2001, posed the questions to be answered in the run-up to the event: What does sustainability mean in a market that is becoming increasingly controversial? How can economic incentives be combined with social responsibility and sustainable urban development? And: How much state intervention is necessary – or too much?
“Curbing regulatory madness”
For Basel-born Prof. Dr. Christoph A. Schaltegger, one thing is clear: the state’s influence on the construction and real estate industry is enormous – and needs to be curbed. The professor of political economy, director and founder of the Institute for Swiss Economic Policy (IWP) at the University of Lucerne and former member of the executive board of economiesuisse criticized Bern and its authorities. He said that subsidyitis and patronage politics were rampant there in their purest form. “The federal government is twice as big as the state quota implies,” he told the 300 or so guests at the symposium in Zurich’s Kunsthaus.
The Swiss state is growing more than twice as fast as the productivity of the economy and is now accumulating “implicit debts of over 300 percent of economic output”, Schaltegger continued. His call: the “Sturzenegger approach”, a thorough cleaning of public finances à la Argentina. At the same time, he argued for a significant reduction in federal regulation. He referred to the sharp increase in the number of ordinances and decrees since the 1970s. Of course, many of these federal decisions also affect the local construction and real estate sector.
Artificial intelligence as a remedy?
Prof. Dr. Christian Kraft, Head of the Real Estate Competence Centre at Lucerne University of Applied Sciences and Arts, then turned his attention to the topic of structural (dis)order and the question of whether artificial intelligence could possibly promote investment security in the “chaos of Swiss-German building laws”. His answer: a clear yes and no. The current uncertainty, which is partly location-specific, is primarily due to longer approval periods for real estate projects at BZO level. Between 2011 and 2024, for example, the average approval period increased from less than 100 days to almost 200 days on average. In addition, there has recently (since 2020) been a sharp increase of 20 to 30 percent in the planning and construction costs of apartment buildings, according to Kraft.
Successful neighborhood mix and fatal objections
Dr. Sibylle Wälty, lecturer at ETH Zurich and founder of Resilientsy, then showed what added value the concept of “10-minute neighborhoods” can create in land use planning. Her research and consulting focus is on a balanced mix of residential and working populations as well as other important factors for liveable urban districts. Dr. Wolfgang Müller, Partner & Head Real Estate at MLL Legal Ltd, then shed light on the “room for contradiction”. He explained where current case law offers opponents and “project obstructors” a hand and what conclusions politicians and the real estate industry could and should draw from this.
Decency and consideration in residential construction
After the coffee break, Paolo Di Stefano’s symposium presentation entitled “More freedom and personal responsibility” dealt impressively with how real estate investors can move “from problems to prospects” and make residential real estate “fit for the future”. The experienced Head of Real Estate Switzerland at Swiss Life Asset Managers (with around 37,000 residential units in its portfolio throughout Switzerland) showed, among other things, a successful example of portfolio renovation without vacancy notices at the Schmiede in Zurich-Wiedikon. He also presented the Au-Park in Wädenswil, an almost completed major new construction project in which, in addition to around 200 rental apartments, many condominium units are being built by Swiss Life Asset Managers.
At the symposium, he made a plea and at the same time urgently appealed to the representatives of the real estate industry to speak with one voice to both politicians and the general public. He also pointed out self-critically that the current representation of the farming community in the Swiss National Council and Council of States, for example, is far more important and influential than that of the construction and real estate industry. Di Stefano warned that speculative building investors and long-term institutional investors were sometimes lumped together in the “political power play”. It is important to work together to counter this with arguments and show that “decent building also means consideration”.
“Simply make good and convincing projects”
The major Group of 15 event at the Zurich Kunsthaus concluded with a slightly peppery future talk by conference host Rainer Maria Salzgeber with National Councillor Beat Walti (FDP) and Green Liberal Councillor Esther Keller (Canton of Basel-Stadt). They agreed that regulations in the construction sector should not continue to grow wildly and that, above all, discretionary leeway should be made possible for real estate projects. Both warned against an “unholy political alliance between left and right”, which could have counterproductive consequences for the real estate industry.
Beat Walti, who has been President of the VIS Swiss Real Estate Association since 2023, which represents the interests of institutional investors such as pension funds, insurers and private real estate companies in federal Berne, called on the real estate industry, which he warned at the beginning with a “yellow card”: “Show what you are building and doing in order to create trust – among politicians and the general public”. Esther Keller, Head of Basel’s Department of Construction and Transport, agreed and summed up her demand succinctly in her closing statement: “Just do good and convincing projects”.
