The housing market in the Canton of Zug is facing significant strain due to a shortage of apartments and rising prices. Demand for both owner-occupied and rental properties remains strong, leading to continuous increases in home prices and rental rates.
Zug is one of the most expensive regions in Switzerland for housing due to its booming job market, favorable tax conditions, and proximity to major economic hubs. The population in Zug has increased by 1.1 percent in 2023, largely due to immigration, resulting in a record low vacancy rate of 0.4 percent. The lack of available living space, combined with an affluent demographic and declining mortgage interest rates, is driving further price hikes. Certain areas within Zug, such as the Berg region, have experienced dramatic price increases, with inflation rates exceeding 10 percent.
The rental market in Zug is highly competitive, with apartments being advertised for an average of just 10 days. The vacancy rate is only 0.2 percent, and rental prices are approximately 50 percent above the national average. While there are plans for new rental apartments, the impact of increased construction activity may not be felt until mid-2025.
The commercial real estate sector in Zug remains stable, with no significant overcapacity. However, traditional retail spaces face challenges from online retail.
The overall economic landscape in Zug, driven by its job market and tax conditions, suggests continued growth in both residents and businesses. Stakeholders in the real estate market will need to navigate supply constraints and evolving consumer preferences to accommodate the growing population and changing economic environment.