Inconsistent regional rent development and price increase for houses

On average, rents rose by 0.3 per cent in Switzerland over the course of January. Depending on where they plan to live, however, tenants looking for accommodation can expect rents to rise or fall in January, as can be seen from the regional development of the offer indices. This is shown by an analysis of the advertisements in the Swiss Real Estate Offer Index, which is compiled and published by ImmoScout24 in collaboration with the property consultancy IAZI.

Falling rents in Zurich, rise in Central and Northwestern Switzerland
“A regional analysis shows clear differences in the development of rents. For once, the greater Zurich region is the only one to see falling asking rents: Prospective tenants can benefit from a reduction of -1.1 per cent,” says Martin Waeber, Managing Director Real Estate at SMG Swiss Marketplace Group. However, with the exception of Central Switzerland (+1.4 per cent) and Northwestern Switzerland (+1.2 per cent), the increases in the other regions were moderate. The increase was +1.0 per cent in Ticino, +0.6 per cent in the Lake Geneva region, +0.4 per cent in the Central Plateau and +0.3 per cent in Eastern Switzerland.

Asking rents will likely continue to rise over the course of the year. Despite the current decline, this also applies to the greater Zurich region. While immigration to Switzerland continues to be strong, rental housing construction is lagging behind – resulting in a housing shortage. “Tenants in existing tenancies must expect higher costs due to the second rent reference rate increase in 2023 by 0.25 per cent at the beginning of December. This entitles landlords to enforce rent increases of up to 3 per cent as of April 1, 2024,” Waeber continues.

Residential property: Price expectations for single-family homes increased
Anyone wanting to purchase a single-family home was confronted with asking prices that were an average of 0.9 per cent higher in January. In contrast, the asking prices for condominiums have remained practically constant (+0.1 per cent). Over the last twelve months, there have been increases in both single-family homes (+0.9 per cent) and condominiums (+3.4 per cent). A closer look at the development reveals that the advertised prices for houses stagnated over the course of 2023 and are now making a significant jump upward in January 2024. Meanwhile, condominiums were already exposed to a constant increase in the previous year. After an uncertain phase in 2023, sellers are apparently growing in confidence that this trend will continue in 2024. Last but not least, the fall in mortgage interest rates in recent weeks is helping to support demand for properties to purchase.

As at 31 January 2024

The Swiss Real Estate Offer Index is published on the ImmoScout24 and IAZI AG websites. 

www.immoscout24.ch/immobilienindex
www.iazi.ch/angebotsindizes

Detailed information and statistics about the overall Swiss trend and those in the various regions are available in the Download section.