Easing on the Swiss rental market not only in July

During the holiday month of July, asking rents remained virtually unchanged compared with the previous month. This underscores a trend since the beginning of the year, which has seen signs of easing in the Swiss rental housing market, particularly when compared with previous years. However, this does not apply equally to all cantons, as the latest figures from the Homegate Rent Index show.

The Homegate Rent Index for asking 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 offers. Compared to the previous month, the index increased by 0,1 points in July and now stands at 130,9 points (up 0,1%). Compared to the previous year, asking rents have risen by 1,7% across Switzerland.

This underscores the signs of easing on the Swiss rental housing market since the beginning of the year. Rents rose by 1,3% during this period. In the same period last year, the increase was more than twice as high. Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group, sees immigration as one of the reasons for this development: “Net immigration to Switzerland in the first five months of 2025 was 11% lower than in the same period in 2024. This continues the downward trend, with net immigration in 2024 already 15,6% below the 2023 level. This led to a more pronounced flattening of the rental trend.” Nevertheless, the increase in rents since July 2020 remains remarkable: Asking rents in Switzerland have risen by a total of around 14% since then. In the canton of Zurich, rents are more than 21% higher than five years ago.

Change in the cantons: Higher rents primarily in Eastern and Central Switzerland
A look at the cantons with the highest rent increases shows that the canton of Schwyz and some regions in Eastern Switzerland occupy the top spots. Since the beginning of the year, asking rents in the canton of Schwyz have risen by 3,5%, followed by Graubünden, Glarus and in the combined Appenzell cantons (2,5% each). Although these increases are considerable, the increases in the same period of the previous year were significantly higher in the cantons that were leading at the time.

Change in the cities: Weaker rental price growth in city centres
The decline in rental price growth in Switzerland is driven by developments in urban centres, where the market is calming down. In the city of Zurich, rents have risen by 1,7% since the beginning of the year – significantly less than in the same period last year (3,1%) and far below the 8,2% recorded in the first seven months of 2023. For the first time in several years, rents in the city of Zurich and the canton are growing at roughly the same pace again. In other Swiss cities, too, rent growth since the beginning of the year has not been uniform. Lucerne recorded the largest increase of 1,8% compared to December 2024, followed by Zurich (up 1,7 %) and Bern and Lugano (both up 1,4%). This follows a significant decline in Lugano in July compared to the previous month (down 1,3%).

Outlook: Moderate price increases expected
Waeber expects rents to continue rising moderately in the coming months and years: “The impetus from new construction is unlikely to be sufficient to counteract the current trend in rents.” Accordingly, the number of vacant rental apartments is also expected to decline slightly again, which, combined with stable, albeit slightly declining immigration, will lead to less steep, albeit persistently higher, rental prices, Waeber predicts.

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.