Anyone looking for a new flat has to dig deeper into their pockets. In October, demanded rents increased across Switzerland. Apartments have also become more expensive. There was only a slight decrease in single-family homes.
The Swiss Real Estate Offer Index rose 1.4 percent in October, according to a study published Wednesday by SMG Swiss Marketplace Group (including Immoscout24) and real estate consultancy IAZI. Values announced in apartment advertisements are included in the calculation.
Rents demanded rose sharply, especially in the greater Zurich region (+3.7%) and central Switzerland (+3.8%). Only slight increases were observed in eastern Switzerland (+0.6%), Mittelland and Lake Geneva region (both +0.4%). Prices fell in northwest Switzerland (-0.6%) and Ticino (-2.9%).
Inflation puts pressure on prices
Tenants need to be prepared for further price increases. “Due to rising interest rates, the reference interest rate under the tenancy law could be raised as early as spring 2023. This allows for rent increases of up to 3 percent,” explains Martin Waeber of SMG. Inflation can also be partially reflected in rents. “Additional pressure comes from increased demand caused by immigration and housing shortages that are prevalent in many regions,” he continues.
On the other hand, prices in the owner-occupied domestic market developed in the opposite direction. Condominiums became more expensive by 0.7 percent, while providers of detached houses reduced their prices by 0.5 percent. However, despite the increase in financing costs due to the interest rate hike, a radical correction is not expected. The excessive demand seems too big for it. (SDA)