Swiss rental prices increased sharply in 2023
Tenants looking for a flat in Switzerland had to dig deeper into their pockets last year. Asking prices in the rental flat market rose even faster in 2023 than in the previous year due to low construction activity. No improvement in sight.
According to the Homegate rent index, which is compiled jointly with the ZKB, asking rents rose by 4.7% overall in 2023. This was the strongest annual growth in rents since the survey began in 2009, as Homegate announced on Thursday. The index rose by a further point (0.8%) to 125.2 points in December compared to the previous month.
According to the press release, the rental property market is not coming to rest. The rising prices are due to the combination of low construction activity and increased demand. All cantons are affected.
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On the one hand, the high net immigration has created additional demand for living space. On the other hand, many people interested in buying their own home have postponed the purchase of residential property due to the higher mortgage interest rates and have held on to their rental property. Vacancy rates therefore continued to fall over the course of the year, resulting in a corresponding shortage of supply.
Schwyz and Zurich with highest increase
Rental prices rose the most in the cantons of Schwyz (11%) and Zurich (8%). Zurich, with its economic centres, is a magnet for immigrants, so vacancy rates are very low here, according to the report. The high increase in Schwyz is likely to be due, among other things, to the effects of people moving away from Zurich.
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According to Homegate, this effect is also likely to have played a role in Schaffhausen (6%). In Graubünden (7%), another canton with above-average rental price increases, the high demand for second homes had an influence.
In a separate analysis of the cities, Zurich also comes out on top with an increase in asking rents of over 13% within a year. In addition to the high population growth, Homegate points to the challenges of high-density construction.
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Looking ahead, Homegate is not giving the all-clear. Swiss construction activity will lag behind previous years, as there are only a few construction projects in the pipeline. At the same time, construction costs remain high, which makes new projects more expensive. And the rise in interest rates offers investors other investment opportunities. As a result, asking rents are likely to rise further in 2024.
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