Housing front cost shock
The rent increase affects all of Switzerland
Not only those who are looking for a new apartment expect higher rents in 2023. Existing rents are also rising. Added to this is the cost-of-living adjustment and an increase in ancillary costs.
Housing costs are expected to rise in all regions in 2023 – including Zizers GR.
Dorothea VollenweiderEditor Economics
Tenants will have to dress warmly in 2023. Literally, because heating is becoming more expensive. But also because the property managers will raise monthly rents. And in all regions of the country.
“The increase in rents is a Swiss-wide phenomenon,” says Ursina Kubli (43), senior real estate expert at ZKB. Those who are looking for a new apartment will be hit first.
Advertised apartments cost more
Vacancies are lowest in the Zurich area, central Switzerland and the Lake Geneva area. “Therefore, the increase in these regions should be higher than in the rest of Switzerland,” says Fredy Hasenmaile (55), real estate expert at Credit Suisse.
“The rise in rents is a Swiss-wide phenomenon”Ursina Kubli (43), senior real estate expert at ZKB
According to CS, asking rents will increase by 4 to 4.5 percent by the end of the year due to the growing shortage. That makes a difference, because rent is a major cost factor in the household budget.
Existing rents are also rising
But even people with an existing rental agreement are not immune to price increases. The reason: 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
If the first reference interest rate step occurs, the landlords are legally allowed to increase the rents. ZKB expects this to be the case in the first half of 2023. Credit Suisse does not expect the first rate hike until September 2023. “We then expect the second increase around a year later,” says Hasenmaile.
With the first increase, rents increase by 3 percent. However, by no means every landlord is then allowed to raise the rent! The prerequisite is that today’s leases are based on a reference interest rate of 1.25 percent. “That should be the case with almost half of all rental contracts,” says Kubli.
Inflation compensation and additional costs
Inflation means that tenants are faced with another cost hammer: the rise in prices, which, according to CS, will have even more of an impact than the increase in the reference interest rate.
“We expect rent increases of up to 4.3 percent by the end of 2023 due to inflation and general cost increases.”Fredy Hasenmaile (55), real estate expert at Credit Suisse
“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 landlords will claim the inflation adjustment.
And last but not least, as mentioned, the ancillary costs are also increasing. In the spring accounts, the banks expect 40 to 60 percent higher heating costs throughout Switzerland. Those tenants whose buildings are heated with oil or gas will be hit hardest.
Zurich in 6th place: These are the most expensive cities in the world(01:27)