The housing market in Switzerland is facing a unique challenge, and it's all about the older generation's attachment to their homes. This issue, which has been a topic of discussion for some time, is now highlighted in a new report by Helvetia and Sotomo. The report sheds light on the consequences of older adults' reluctance to downsize, and how it impacts the entire housing market.
The Impact of the "Best Ager" Generation
People aged 55 to 74, often referred to as the "Best Ager" generation, are less likely to move, even though they often live in large homes or apartments. When they do decide to move, it has a significant impact on the market, as these larger properties become available and are later occupied by families. This trend is a key finding of the report, emphasizing the importance of this age group in the housing market dynamics.
A Closer Look at the Numbers
The study reveals that before the "Best Agers" move, only about 12% of their larger residences are occupied by families. However, after their relocation, this number jumps to a remarkable 36%. Michael Hermann from Sotomo highlights the significance of these additional moves, stating that they contribute to a more efficient distribution of housing across different life stages.
The Structural Impact
What's interesting is the structural effect this has on the market. Older homeowners or long-term tenants staying put in large properties, despite their changing needs, ties up valuable housing that would be more suitable for younger households. In a market with chronic shortages, this is more than just a personal housing decision; it's a structural issue that affects the entire market.
The Role of Ownership
The report also highlights the role of homeownership as a major obstacle to mobility in the housing market. The probability of moving is over 60% lower for homeowners compared to renters. This is particularly evident in single-family homes, where many "Best Agers" reside and rarely move out. Consequently, when this age group does move, it's often a flat in a multi-family building that becomes available, not a house.
Underutilized Spaces
Additionally, the report finds that around a third of those over 55 live in under-occupied homes, meaning they have more rooms than they need. Yet, this group is not particularly mobile. Those who remain settled often live in larger and more valuable properties compared to those who actually move. This highlights a key issue: it's not always the households with the most excess space that free up housing for the next generation. Often, it's those who are already living in a more compact manner who decide to relocate.
The Way Forward
The study concludes that the housing market could see more movement if older adults were better supported during their transition to a new living phase. As long as homeownership is viewed as a lifelong possession, the willingness to change residences will remain low. This insight suggests that policy interventions and societal attitudes towards housing may need to shift to address this structural issue.
