Rental prices take a break in October 2025 – but no trend reversal in sight

For once, asking rents remained unchanged in October, staying at the previous month’s level. From a regional perspective, however, advertised rents are fluctuating significantly, while a longer-term view reveals the comprehensive inflation of recent years. And there is no sign of a reversal in this trend. This is shown by the latest figures from the Homegate Rent Index.

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 remained unchanged in October at 131.6 points. Compared to the previous year, asking rents rose by 3,1% across Switzerland. Thanks to the comprehensive data history of the rent index, it is also clear that over the last ten years (October 2015), asking rents have risen by 15,6% and by as much as 27,2% compared with 15 years ago (October 2010). And this is only the national average; individual cantons and cities are experiencing even more significant inflation.

Despite the pause in October, asking rents have risen over the past few months, albeit at a slower pace than in previous quarters and years. Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group, attributes the decline in the growth rate primarily to the cooling economic situation: “On the one hand, reduced wage growth is affecting the financial strength of new tenants, and on the other hand, net immigration has been slowed by the decline in job growth since the beginning of the year.” Accordingly, a slowdown in rent increases can be observed in all parts of the country and across all types of housing, Waeber continues.

Change in the cantons
In October, advertised rents rose particularly sharply in the cantons of Schwyz (up 3,4%) and Graubünden (up 2,1%). By contrast, they fell most significantly in Obwalden (down 1,8%) and Ticino (down 1,5%) during the same period. In Obwalden, advertised rents were last at this level in November 2024, meaning that the canton recorded the smallest increase compared with the previous year – as this change is positive in all cantons. Compared to October 2024, advertised rents rose particularly sharply in the canton of Schwyz (up 9,6%) and Nidwalden (up 9,1%).

Change in the cities
The cities surveyed are developing in a similarly dynamic manner: Lucerne recorded the largest increase in October (up 1,9%), while Lugano saw a decline of 2,2%. However, while Lucerne is thus compensating for a temporary decline, Lugano is experiencing exactly the opposite, with a significant increase in September. Compared to the previous year, asking rents have also risen across the board in the cities, particularly in Lucerne (up 6,2%).

Outlook: New Construction Brings Some Calm to the Rental Market
Waeber is cautiously optimistic about the future: “In the near future, the supply of newly built apartments is likely to pick up speed again. This is because construction activity stalled between 2022 and 2024 as a result of the temporary rise in interest rates, which is now having an impact on market supply.” This is also shown by the ZKB analysis: With approximately 47,000 new apartments built across Switzerland, an increase of around 17% is expected for 2026 compared to the previous year. However, this will not yet lead to a significant easing of the rental market, although the increase in asking rents is likely to be considerably lower than in previous years. Across Switzerland, ZKB expects growth of 2,5% for 2025 as a whole and 1,5% for 2026.

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.