Tenants will have to dress warmly in 2023. Literally, because heating is getting more expensive. But also because property managers will increase monthly rents. And in all parts of the country.
“The rise in rents is a Swiss-wide phenomenon,” says Ursina Kubli (43), senior real estate specialist at ZKB. Those looking for new flats will be hit first.
Advertised apartments are more expensive
Vacancies are lowest in the Zurich region, central Switzerland and Lake Geneva region. “So the increase in these regions should be higher than in the rest of Switzerland,” says Fredy Hasenmaile, 55, real estate specialist at Credit Suisse.
According to CS, demanded rents will increase by 4 to 4.5 percent by the end of the year due to increased scarcity. This makes a difference because rent is a major cost factor in the household budget.
Existing rents are also increasing
But even people with an existing lease agreement are not exempt from price increases. Rationale: The reference interest rate is expected to increase in 2023.
This is based on the average mortgage interest rate of Swiss banks. It is determined quarterly by the Federal Housing Office and is decisive for rent adjustments in existing tenancies.
Not all tenants are affected
Landlords are legally allowed to raise rents if the first reference interest rate step occurs. ZKB expects this to be so in the first half of 2023. Credit Suisse does not expect the first rate hike until September 2023. “We expect the second increase in about a year,” Hasenmaile says.
With the first hike, rents increase by 3 percent. However, not every landlord is allowed to increase the rent in any way! The prerequisite is that today’s leases are based on a 1.25% reference interest rate. “This should be the case in nearly half of all lease deals,” says Kubli.
Inflation compensation and additional costs
Inflation means that tenants face another cost attractor: a rise in prices that will have more of an impact than an increase in the reference interest rate, according to CS.
“We expect rent increases of up to 4.3 percent by the end of 2023 due to inflation and general cost increases,” says Hasenmaile. According to the bank, many homeowners will demand an inflation adjustment.
And finally, as mentioned, the side costs are also increasing. In spring accounts, banks expect 40 to 60 percent higher heating costs across Switzerland. Tenants whose buildings are heated by oil or gas will be most affected.