Rental prices continued to rise in 2025, despite declining immigration and lower reference interest rates. The latest figures from the Homegate Rent Index show that, for once, the strong price momentum is not concentrated in urban centres. Although a smaller increase is expected in the new year, structural housing shortages are keeping pressure high.
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 0,5 points in December and now stands at 132,2 points (up 0,4%). Throughout 2025, advertised rents in Switzerland rose by a further 2,3%. However, this increase was lower than in the previous two years, when growth stood at 3,2% (2024) and 4,7% (2023) respectively.
Various factors contributed to this slowdown in momentum last year, as Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group, explains: “On the demand side, net migration fell significantly compared with the previous year (note: Down 12% as of November). However, the continuing excess demand could still not be met by the construction of new flats. The number of vacant flats fell slightly last year.” Furthermore, the recent reduction in the reference interest rate had a dampening effect on existing rents, which was also indirectly reflected in the advertised rents, Waeber continued. “However, this moderated momentum was not enough to completely halt the increase in asking rents,” Waeber concluded.
Change in the cantons: Central Switzerland and Graubünden at the top
The highest rent increases for advertised apartments in 2025 were recorded in Central Switzerland and Graubünden. Graubünden was clearly at the top of the list with an increase of 10,0%, followed by the cantons of Schwyz (up 7,4%) and Nidwalden (up 6,7%). The high attractiveness of Central Switzerland and the associated rent increases are not a new phenomenon. In previous years, the region already showed above-average growth rates in advertised rents.
Change in the cities: For once, cities are not outperforming cantons
In 2025, the increase in advertised rents in major cities was less pronounced than in previous years. In the city of Zurich, advertised rents rose by only 2,2%, which was even below the Swiss average. This was practically never the case in previous years compared to the development in Switzerland as a whole. In Geneva, growth was 3,4% compared to the previous year, and in Lausanne it was 2,2%. At first glance, one might conclude that cities have lost their proverbial pull. However, it is more likely that the now high urban rents have become unaffordable for many households. As a result, those looking for accommodation are focusing on less central locations, which is driving up prices outside the centres. In addition, the decline in immigration, which always has the greatest impact on urban rental markets, has slowed the momentum somewhat.
Outlook: Only a slight increase in 2026
Those looking for a flat cannot expect significantly shorter queues when viewing properties in the new year. Waeber is therefore cautious about the new year: “On the demand side, immigration is likely to have less of an impact, but this does not mean an end to the housing shortage. In recent years, young people in particular have been forced to forego moving house and, in particular, moving into their first home. If the pressure on the housing market eases in one area, many of them will seize the opportunity to move out.” Even if construction activity picks up again in 2026, it will remain at a low level, Waeber notes. “This is because overall, rents are expected to rise slightly again this year.”
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.
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