Exciting price rises: Housing and mobility taking money out of people’s pockets

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What do you spend the most money on? Of course: to live. For many Swiss, mobility comes second; i.e. car and/or public transportation.

And these big spending items continue to grow. In February 2024, goods and services in these areas increased by a whopping 1.6 percent compared to the same month last year.

This emerges from the new, quarterly Womo Index, published by Comparis in collaboration with the KOF economic research center at ETH Zurich. In the housing sector this examines the development of rents as well as electricity and furniture prices. Prices for fuel, car or public transport tickets in the mobility area.

The inflation reference was previously the national consumer price index (LIK) of the Federal Statistical Office (BFS). Their figures are based on a representative shopping cart of more than 1,000 products and services. However, since living and mobility account for 40 percent of the household budget and rapid changes are unlikely in these areas, Comparis wants to look at these areas separately.

Above average price increase

And lo and behold: LIK rose 1.2 percent in February. Womo index shows an increase of 1.6 percent.

This means that if a family’s rent and moving costs were 3,700 francs in February the previous year, the monthly cost in February 2024 was already 3,760 francs. Over the whole year there was an increase in cost of 710 francs. Not every home can tolerate this.

In addition, rental price increases in April are likely to have a much larger impact on official inflation rates in May, according to Comparis financial expert Dirk Renkert. Therefore, Womo expects the index to increase further. Because two interest rate increases and general inflation increased rental costs by up to 10 percent. For many families this means additional expenses of several thousand francs a year. Single-person households over the age of 65 are most affected by this situation.

But it’s not just rent that’s increasing. Mr. and Mrs. Schweizer had to dig much deeper into their wallets than a year ago, especially regarding electricity; by an average of 17.8 percent. Daily cleaning prices for consumables such as storage bags and disposable tableware also increased by 3.7 percent. The price increase in public transport (+3.3 percent*) was the third strongest increase.

There were also price reductions

As a result, prices for heating (gas, heating oil, firewood and district heating) fell by 6.8 percent compared to the previous year. But this is mainly due to the huge price increase last year. Energy remains expensive. The highest price increase in the last 20 years was experienced in this region with 159.7 percent.

Second-hand cars are also cheaper in the field of mobility: They are 4.8 percent cheaper on average compared to February 2023. Additionally, prices for small electrical appliances (-4.3 percent) and living room and office furniture (-3,000,000) fell further. 7 percent) and furniture accessories (–3.0 percent). Especially the prices of electrical appliances have fallen rapidly in the last 20 years.

Source :Blick