Though normally separated in statistical sources, we interpret the areas investment, construction, and real estate as belonging together, since available historical investment data for Switzerland almost always pertains to construction, and since the real estate market can also be largely equated with the sale of land for construction. Apart from construction in the past 100 years, investments in the period of 1850–1914 deserved our primary attention. On the other hand we only dealt peripherally with the real estate market.

Investments 1812–1914

At the Research Institute for Swiss Social and Economic History of the University of Zurich, the end of the 1970s saw the creation of two quantitatively oriented contributions to the history of traffic and construction in Switzerland, the results of which are available in the form of published dissertations. One of them is a complex analysis by Jutta Schwarz of the evolution of gross capital construction investments between 1850 and 1914, and the other a study by Bernhard Beck that deals with the development of building construction investment in the 19th and early 20th centuries.
The estimate by Jutta Schwarz primarily relates to transportation construction and equipment investment. For railroads, Schwarz differentiated between normal and narrow gauge, cable railways, and trolley cars, for other traffic investments, between public road construction, infrastructure investments (gas, water, and electric), and the construction and operation of telephone and telegraph wires. The author did not shy away from pouring over a huge number of contemporary estimates and tallies in order to get an impression of construction costs and the level of investment in individual buildings. The second part of her estimate was more time-consuming yet, as she had to embark upon the long and difficult detour of estimating annual manufacturing levels of iron and non-iron metals and the consumed portion of the investment goods industries in order to reach her goal of reconstructing equipment investments. The main foundation of Schwarz’s model of iron and metal production, consisting of three sequential processes, are statistics of imported and exported metals and the production statistics at the stage of smelting. By adding imports and domestic production and subtracting from them the total of exports, Schwarz at each stage arrived at an estimate of volumetric domestic use. The last production stage yielded a balance in the form of a series which reported the level of domestic demand for equipment goods, i. e. of the tonnage of machines, apparatuses, instruments, commercial vehicles, and tools produced and sold in Switzerland. The valuation of this quantity did not occur through a price series for equipment goods – the available data did not allow the construction of such a series – but through a replacement indicator which between 1850 and 1884 consisted of equal parts of a salary index and a material index and which, between 1885 and 1914, contained the components salary, raw iron price, and price of rolled iron products in a 50:35:15 ratio. Bernhard Beck estimated capital investment accumulation in civil building construction, by far the most important component of capital construction investments throughout the entire observation period on a value basis. The basis of this estimate are insurance values from cantons where fire insurance was mandatory and handled by an official institution. Beck managed to provide series with a length of over 100 years for no less than twelve cantons; six more series extend over periods of 21–55 years. All cantons of the Midland and the Jura, including the French-speaking ones, could be added into the estimate, but the alpine cantons are grossly underrepresented. Measured by total population, the proportion of included regions amounted to 70% in 1820 and 82% in 1910.
Beck’s methodology consisted of determining, with the help of raw data that had been cleaned up with a distortion coefficient, the changes in the invested building capital. In order to estimate building investments correctly, he also had to track possible increases or decreases in the value of already invested capital due to changes in building price levels, and determine values for depreciation. As far as the latter went, it was universally assessed as 9% of the existing capital investment in accordance to a depreciation formula found by Beck in a trade journal. Fire insurance tables, however, only accounted for one third of those 9%. Beck assumes that the remaining 6% were compensated by value-increasing repairs and price increases of the capital stock, and he further assumes that the non-identified depreciations, combined with the extraordinary increases in insurance value he found after complete renovations, equal the price increase of the capital stock. His conclusion is that annual gross investment must have been at the same level as the gross increases in insurance value, as determined by annual estimates, plus fire damage.

Investments 1948–1990

Little to nothing is known about the investment habits of the Swiss during and between the two world wars. Schwarz feels that, while retroactive estimates are not impossible, it would first have to be determined if the estimating methods used for assessing investment activity between 1850 and 1914 are suitable for the processing of the data material of following decades.
The official statistics do not start until the end of the World War II. When the general revision of the line items of the national financials occurred in the second half of the 1970s, heretofore unpublished investment activity data was also examined. Apparently, the reconstruction of the evolution of capital construction investment did not create any significant problems. However, after the change from annual construction surveys by the Delegate for Economic Studies to quarterly statistics of construction expenditures took place in 1970, it turned out that it was no longer possible to count on a base of reliable investment data for public and private building and civil construction. Therefore, the Federal Statistical Office refrained from subdividing construction investment for the years after 1970. (see “The Economy”, vol. 1976, p. 576). Fortunately, the differences that existed between the two statistics were soon eliminated, so that since 1979 we are once again in the possession of a non-aggregated capital construction investment statistic. The case is different for equipment investments, for which an attempt to subdivide into branches was never embarked upon by the Federal Statistical Office. Still, for a short period of time we can present such data: Commissioned by the Economic Research Office of the Swiss Federal Institute of Technology (“Konjunkturforschungsstelle der Eidgenössischen Technischen Hochschule”), Arnold Holz performed non-aggregate projections in the early 1980s which provided information on the level of equipment investments in the branches of the second sector between 1969 and 1985.

Construction Activity 1893–1992

While the total number of all approved construction projects is known since 1942, the total number of actually built projects is known already since 1927. Moreover, data on the construction activity in larger groups of municipalities exists dating back to the time between the world wars, but that data is reminiscent of snapshots which, while interesting, do not provide any indication whatsoever of the long-term evolution of construction activity at the national level. Bluntly stated, the problem is that the data did not always cover the same municipalities: since the Federal Statistical Office used a system that made the inclusion of a municipality into an aggregate dependent on the population of said municipality, the number of included municipalities was constant only between two censuses.
We did not deem it feasible to include those marginally informative series into this publication. In their stead, we present a table that shows the number of newly constructed apartments, construction permits, as well as the changes in total and unoccupied apartments in the ten largest cities in Switzerland over a very long period of time. Even the numbers in this series, the construction of which required the consultation of several sources, cannot be compared without caution; rather, it is advisable to consider the changes of 1926, 1934, and 1950/51 in the cities of Geneva, Zurich, and Basle. Apart from that, this presentation provides a rather precise picture of the construction economy and the evolution of the apartment supply in Switzerland’s larger cities between 1910 and 1992.
The officials of the city of Zurich were especially thorough in gathering construction and apartment supply data over the past 100 years. The wealth and largely homogenous structure of the assembled data material – its only flaw being the break in the beginning of the 1930s – caused us to dedicate several pages to construction in the city of Zurich.

Real Estate Market

Some cantons began recording data on the number, area, and value of properties which changed hands as far back as the 19th century. In the Lucerne districts of Entlebuch, Sursee, and Willisau, changes in ownership and ownership rights can even be traced back into the early 1860s. A set of Federal Statistical Office change of hand statistics by canton begins in 1901 and ends in 1946, but it only includes data for certain cantons. Publication of national real estate statistics do not begin in Switzerland until the year 1963. Since those statistics only show parcels purchased by foreign nationals at the canton level, a comparison with the canton summaries of the years 1901–1946 is not possible. A further argument against printing the national statistics was the fact that they were continued in an entirely changed form after 1986, so that an overview of parcels purchased by foreign nationals based on homogenous data would have been limited to less than 25 years. The real estate transaction values for the Limmat metropolis, provided by the Statistical Yearbook of the city of Zurich, extend over a period almost four times as long, and thus better fullfiled the criteria for inclusion into this publication, though it must be clearly stated that the results of the surveys in the city of Zurich do not say anything about the conditions in the rest of Switzerland.

SOURCE: «Investments, Construction, and Real Estate Market» in Ritzmann/Siegenthaler, Historical Statistics of Switzerland, Zürich: Chronos, 1996, 881-885