Now housing costs are increasing even faster: Record increases in rental prices

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Tenants in Switzerland had to dig deeper into their pockets when looking for flats last year. Asking prices in the rental apartment market increased faster in 2023 than in the previous year due to lower construction activity. There doesn’t seem to be any improvement.

According to the Homegate rent index collected together with ZKB, requested rents increased by 4.7 percent in total in 2023. This has led to the strongest annual rise in rental prices since the survey began in 2009, Homegate revealed on Thursday. The index rose to 125.2 points in December, an increase of one point compared to the previous month.

All cantons affected

According to the statement, the rental housing market is not calming down. Rising prices are due to a combination of lower construction activity and increased demand. All cantons are affected by this.

On the one hand, due to intense migration, the need for additional living space arose. On the other hand, many people who wanted to own their own home postponed buying a house and were stuck in their rented flats due to high mortgage loan interest rates. Therefore, vacancies continued to decrease throughout the year and accordingly, the supply began to shrink.

Double digit increases

Rental prices increased the most in the cantons of Schwyz (+11%) and Zurich (+8%). They say Zurich, with its economic hub, is a magnet for immigrants, so vacancies here are very low. The high increase in Schwyz is probably due to alternative influences from Zurich, among other factors.

According to Homegate, this effect may also have played a role in Schaffhausen (+6%). In Graubinden (+7%), another canton where rent increases were above average, the high demand for second homes had an impact.

Expensive, more expensive, city of Zurich

When the cities are examined separately, Zurich ranks first with a rent increase of over 13 percent in one year. Homegate highlights the challenges of dense construction in addition to high population growth.

Looking ahead, Homegate doesn’t make everything clear. Construction activity in Switzerland will lag behind previous years as there are only a few construction projects under construction. At the same time, construction costs remain high, making new projects more expensive. The increase in interest rates also offers investors other investment opportunities. Therefore, requested rents are likely to increase further in 2024. (SDA/dvo)

Source :Blick