New ways of dealing with grey energy and housing allocation
In a recent analysis, Fredy Hasenmaile, Chief Economist at Raiffeisen Switzerland, sheds light on the challenges and opportunities in the real estate market, in particular the issues of asking versus existing rents, housing misallocation and the saving of grey energy.
The property sector faces the challenge of reducing its carbon footprint. While institutional investors have already made progress, Fredy Hasenmaile points out that the next step is to consider grey energy – the energy used to construct properties and their materials. Previous efforts have focused mainly on the operational phase of properties, but including grey energy in the calculations could revolutionise the understanding of sustainability in construction.
In his analysis, Hasenmaile also points to a problematic misallocation of living space in Switzerland, caused by the current tenancy law, which leads to a large discrepancy between asking rents and existing rents. Older households in particular remain in flats that are too large, as moving to smaller units is financially unattractive. This leads to inefficient utilisation of living space and an increasing housing shortage.
The study by Raiffeisen Switzerland identifies enormous potential for improving the allocation of living space: if flats were distributed in such a way that each household had just one more room than people, 170,000 flats could be saved. This would not only alleviate the problem of housing shortages, but would also save considerable amounts of grey energy.
In view of the expected increase in new rents and the resulting increase in disincentives, which also lead to vacancies and low tenant mobility, Hasenmaile appeals to the need to address the causes of this misallocation under tenancy law and to find innovative solutions for a more effective transfer of living space.