Asking rents on the rise, but price momentum is slowing

Asking rents in Switzerland continued to rise sharply in the first quarter of the year, with regional variations, including in Central Switzerland. But even in the city of Zurich, the lull appears to be waning. This is shown by the latest figures from the Homegate Rent Index. Low residential construction activity remains the primary driver of prices. Even reduced immigration and a lower reference interest rate cannot fully offset this, although price growth is slowing.

The Homegate Rent Index for advertised rents is compiled by the property marketplace Homegate in collaboration with Zürcher Kantonalbank (ZKB). It measures the monthly, quality-adjusted change in rental prices for new and re-let flats based on current market listings. Compared with the previous month, the index rose by 0.2 points in March 2026 and now stands at 133.1 points (up 0,2%). In the first quarter, asking rents across Switzerland saw moderate growth of 0,7%, compared to the previous year, they have risen by 2,3%.

Residential construction activity, immigration and reference interest rate are key factors
The main driver of this rise is the low level of residential construction relative to demand, which remains high. The rent index rose by 2,6% in the previous year (March 2025 compared with March 2024), whilst the figure for the year before that was 5,5%. This illustrates the slowing momentum in asking rents. Similarly, the downward trend in immigration is contributing to the slower rise in asking rents. In 2025, a net figure of just over 10% fewer people immigrated to Switzerland than in the previous year. And in the first few months of this year, the decline continued, further dampening the additional demand for rental accommodation.

However, construction activity and immigration are only part of the explanation, as Martin Waeber, Managing Director of Real Estate at SMG Swiss Marketplace Group, points out: “The latest cut in the reference interest rate is also having an impact on advertised rents. This led to a fall in existing rents at the start of the year, which in turn has reduced the upward pressure on advertised rents”. Overall, however, these mitigating factors would not be sufficient to stabilise rent levels, according to Waeber. The consequence: “Advertised rents are continuing to rise, albeit at a slower pace than in previous years”.

Changes across the cantons: Central Switzerland leads the way
Looking at the trend in asking rents at the cantonal level, it is striking that many cantons have seen a decline compared with the previous month, led by Uri (down 1,7%) and Obwalden and Nidwalden (both down 1,1%). Overall, however, asking rents have fallen in over half of the cantons. They have risen significantly, however, in Vaud and Schwyz (both 1,1%). Compared with the previous year, Central Switzerland has recorded the strongest growth, including among the cities (see below). The cantons of Nidwalden (7,3%) and Zug (5,1%) have seen a marked rise in asking rents over the past twelve months. This trend in rental prices in Central Switzerland is not new, but continues the strong growth rates seen in previous years.

Change in the cities: The respite in Zurich seems to be over
Among the cities surveyed, Lucerne is clearly in the lead with an 8,2% increase over the last twelve months, with rents there rising by 3,1% in the first quarter of 2026 alone. It is also noteworthy that asking rents in the city of Zurich rose at an above-average rate of 1,6% in the first quarter. Living in the city on the Limmat remains highly attractive. This latest rise in Zurich contrasts with the moderate growth in asking rents of 2,4% over the past twelve months, suggesting that the respite was, in fact, only brief.

Outlook for 2026: Moderate growth in asking rents expected
Although the decline in immigration is providing some relief in the rental housing market, asking rents are expected to continue rising in 2026 – albeit at a slower rate than in previous years. The reason for this is the ongoing housing shortage, which is not being adequately addressed by the subdued level of new-build activity. Waeber therefore concludes: “For tenants, this means that the trend in rents continues to point upwards and, particularly in central locations, the search for accommodation is likely to remain challenging”.

Method of quality adjustment
The development of asking rents in Switzerland is adjusted for the different quality, location and size of the flats. The advantage of this so-called hedonic method is that the real rental price development for new and re-let flats is reflected on Homegate. The Homegate Rent Index is the oldest quality-adjusted rent index in Switzerland and is considered a reference source for real estate professionals to determine the price of rental properties.