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Downside of the economic boom – There is an acute housing shortage in Visp – News

31 March 2022

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The chemical company Lonza has created 2000 jobs at the Visp site in the last two years. Rental apartments are therefore in demand like never before.

Author:
Annik Ott Fischer and Roger Brunner

On a tour of Visp, Niklaus Furger is still amazed. Furger is the mayor of the small town, which has developed enormously in recent years. Arriving in front of the new Lonza complex, he says: “Last year alone we issued 40 building permits to Lonza. That’s huge.”

Expansion also a challenge

Visp is the most important research and production site of the Lonza Group. This is where the vaccine for Moderna is made. After Lonza entered into a ten-year agreement in April 2020, the workforce grew from 2,800 to 4,500 permanent employees. Another 1500 people are temporarily employed, 240 positions are vacant. The figures from real estate consultants Wüest Partner show that Lonza is expanding so quickly that Visp is almost being overwhelmed.

A view of Visp with the Lonza premises.

This has consequences for the housing market. According to Wüest Partner, it has now almost dried up. The supply rate (proportion of advertised apartments in relation to the stock per quarter) was 1.8 percent at the end of 2021. This value is lower than in cities like Zurich, Geneva or Basel. Across Switzerland, the supply rate is 5.8 percent. In order to adapt supply to demand, construction is going on everywhere in Visp.

400 new apartments are being built

According to Mayor Furger, around 400 new apartments are currently being built. “Our order books are full until the end of the year. We can’t accept anything anymore,” says contractor Olivier Imboden. But these apartments will only be ready for occupancy in one to two years. The situation will therefore not improve so quickly for people looking for an apartment. Rents have risen by 3.7 percent in the last year – significantly more than the national average.

So while Visp also has to bear the negative consequences, the whole of Upper Valais is benefiting from the economic boom. 40 out of a total of 63 communities were able to grow – in a region that used to struggle with migration. Despite all the odds: the cluster risk for Visp and the entire Upper Valais is increasing. Because the region is now heavily dependent on the business performance of a single company – the Lonza Group.

Rental apartments: There is still great demand on the Swiss rental apartment market. The corona pandemic has led to people wanting more space, including for working from home. Demand is likely to remain high in the current year as well, as immigration is likely to pick up. Supply has declined more sharply in the last 12 months than it has in 9 years.

home ownership: The prices for single-family houses rose as much last year as they did 30 years ago – the demand in Corona times was enormous. The offer is so small in certain regions that those interested can hardly find anything. Since construction activity is declining despite the boom, prices are likely to rise again this year, according to Wüest Partner’s expectations.

Business premises: The market for office space is developing more or less stably thanks to the growing labor market. However, the term of the newly concluded leases in 2021 has decreased. Companies want to be more flexible and no longer want to be tied down for so long. In the current year, Wüest Partner expects rents to be 0.9 percent lower.