For a long time, the Zurich rental market has been a nightmare for anyone looking for an apartment in the canton. «Anyone who has searched for an apartment in recent years knows the picture: crowds in the stairwell, short viewing windows, many interested parties – and, in the end, often a rejection», Zürcher Kantonalbank (ZKB) writes in its real estate barometer published on Tuesday for the third quarter of 2026, describing the situation.

But according to the state-owned bank, a slight easing is now emerging – which ZKB cautiously interprets as a «possible start to a trend reversal». It bases this assessment on the number of vacant apartments. While nationwide the share of vacant flats fell from 1.01 percent in 2025 to 0.93 percent in 2026 (the lowest level in years), in the canton of Zurich the vacancy rate rose from 0.48 percent to 0.52 percent.

Historically speaking, vacancy rates remain at low levels.

The increase is most pronounced in the suburban belt, but there are also slightly more vacant apartments in the city of Zurich.

Ursina Kubli, head of real estate research at ZKB, comments: «After rising pressure, the canton of Zurich is showing first signs of easing. This is by no means all-clear, but the market is moving away from extreme scarcity.»

Less Net Immigration, More New Construction

ZKB attributes this development to two factors: First, net immigration into the canton fell significantly in 2026 compared with previous years; second, construction activity picked up, creating more housing. Both factors should also help gradually slow growth in asking rents.

If the Zurich rental market eases, this could have repercussions for the whole of Switzerland. According to ZKB, in recent years many households have moved from the canton of Zurich to cheaper neighbouring cantons because of the housing shortage. If pressure in Zurich now eases, fewer households may decide to move away.

The Impact of SARON Mortgages on the Reference Interest Rate

For those who are not looking for an apartment, but have been tenants of the same property for a longer time, costs could soon rise. ZKB sees upside potential for the mortgage reference interest rate.

The reason is the significantly higher energy costs, to which the Swiss National Bank is expected to respond with key interest rate hikes. In addition, the share of variable-rate mortgages (based on the money market rate SARON) has increased. Kubli expects this to contribute to the reference interest rate rising again in the second half of 2027.

For now, the uptrend in Zurich owner-occupied housing remains intact.

There is no sign of easing in home prices, however. The Zurich owner-occupied housing index (ZWEX) rose by 1.6 percent in the third quarter. Even so, ZKB notes that the more than 20-year uptrend in property prices is losing momentum. Prices in Switzerland are expected to rise by only 2.5 percent in 2027, and by 2 percent in the canton of Zurich.