Anyone who has lived in a rental apartment in recent years has probably been bothered by this headline more than once: landlords live cheaper than tenants. Mortgage interest was so low that it made financial sense to buy a house despite high debt.
This must have left a stale taste among tenants – and that includes about 60 percent of the Swiss population.
But the tide has turned! Until recently, purchasing was cheaper almost everywhere in Switzerland. Then interest rates rose. Home buyers now pay three percent or more on a flat rate mortgage. “It meant that the tenants were suddenly getting better again,” Donato Scognamiglio (52), president of real estate consulting firm Iazi, tells Blick. And not just in the communities around Lake Zurich.
Landlords pay extra
“You have to go very far to make buying your own home worthwhile,” says Scognamiglio (52). A new analysis by Iazi shows which communities today pay the price of being a tenant.
The company has monthly costs for the owners of a new 120 m2 condominium for each municipality in Switzerland over the next ten years.2 and tenants were calculated and compared with each other. A three percent mortgage interest rate was used for the calculations.
The result: Homeowners are in bad shape wherever population density increases. And that doesn’t just mean cities.
Tenants benefit here
For example, in the municipality of Lucerne of Ebikon, a tenant can expect an average monthly cost of housing of 2,800 francs over the next ten years. A landlord would have to pay $3,100 per month for a typical newly built condo with a ten-year fixed-rate mortgage and an 80 percent loan-to-value ratio. It is ten percent cheaper to rent in Ebikon. In Lucerne, this rate is even 25 percent.
It is even more extreme in the municipality of Zug. Here, a landlord will pay an average of over 55 percent more per month than a tenant over the next ten years. Landlord in a new flat in Adliswil ZH pays more than CHF 1,000 per month from a tenant in a similar flat. And in Samedan, GR tenants save 30 percent.
Buy or not?
Renting in many parts of Switzerland is now worth it again. For example, Zurich, Lucerne, Graubünden, Basel-Stadt and Basel-Landschaft, Geneva and St. Gallen in most of the cantons. In parts of the cantons of Vaud, Valais, Appenzell Innerrhoden and Appenzell Ausserrhoden, landlords are also worse off than tenants.
“Of course, the decision to rent or buy isn’t solely dependent on the financial dimension,” says Scognamiglio. For this reason, real estate professionals generally do not recommend buying a home. One of the determining factors is whether a home buyer has the necessary funds to do so. And whether it can afford mortgage interest rates – even if they continue to rise.