Construction market likely to pick up speed again in 2025
Published: Thursday, Oct 24th 2024, 17:20
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Construction in Switzerland is likely to increase again next year. In spring, the experts at real estate company Wüest Partner were still predicting subdued growth in the construction market. Now, however, they are even expecting a slight increase in the current year and "strong growth" for 2025.
According to the study published on Thursday, the year 2024 could therefore mark a turnaround. This is because building construction investments have been declining in real terms, i.e. adjusted for construction price developments, since 2017.
Specifically, Wüest Partner anticipates a slight increase of 1.2 percent. Taking into account this year's construction price increase of 0.5 percent, this would mean "real growth for the first time in seven years".
More building permits
Wüest Partner cites the rising number of building permits as the main reason for the upturn in construction activity. This is likely to be "more noticeable" in 2025. Specifically, growth in building construction is expected to total 4.6 percent. The new construction sector is likely to increase by 4 percent and the conversion sector by as much as 5.7 percent.
The potential growth is also being fueled by several factors: firstly, there is still high demand: "The excess demand in recent years has led to a pent-up housing shortage," it says. This ensures the absorption of newly built or renovated apartments and brings rising income, falling vacancy rates and low fluctuation costs.
Secondly, financing costs are falling again as a result of lower interest rates. According to the experts, more stable construction prices and political measures will also stimulate construction activity.
©Keystone/SDA
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