Overall, flat and office space rental prices in Switzerland were little changed in the third quarter. However, a look at the individual regions reveals clear differences.
Rents for apartments in old buildings in Switzerland fell by 0.6 percent quarter-on-quarter, according to the consultancy and research firm Fahrländer Partner Raumentwicklung (FPRE) on Friday. Meanwhile, new housing fell 0.7 percent.
Large regional differences
But there was a 3.4 percent drop for new buildings in Jura. Related prices in Basel (-1.9%) and Mittelland (-1.4%) fell significantly compared to the previous quarter. On the other hand, prices rose the most in southern Switzerland with 3.9 percent and in the Alpine region with 1.3 percent.
“The changing macroeconomic environment with rising interest rates and the return of inflation has so far not had a significant impact on rental prices in Switzerland, as this market generally reacts slowly to changes,” FPRE partner Stefan Fahrländer said in a press release. .
Increasing reference interest rate in 2023
Next year, however, Fahrländer expects an increase in the reference interest rate for flat rents for the first time since its implementation in 2008. In addition, according to the expert, some of the inflation will be passed on to tenants, which could lead to slightly higher rents.
The reference interest rate is set quarterly by the Federal Housing Office and is decisive for rent adjustments in existing open-ended tenancies. The reference interest rate was 3.5 percent when it was introduced throughout Switzerland in 2008, and is now 1.25%.
Office rents are also stagnant
Office rents also stagnated after the increase in the last three quarters. Looking at Switzerland as a whole, there was a 0.4 percent price drop.
However, there is a significant increase of 8.7 percent in the last four quarters together. This means that the office market is roughly back to the level it was at the end of 2019.
In offices, too, the development from June to September differed greatly from region to region: the recovery trend continued in southern Switzerland (+5.0%) and Lake Geneva (+4.2%), while in Basel (-4, 3% continued. ) and Zurich (-2.2%) rents fell. (SDA)