Swiss rents forecast to rise up to 5% annually, housing chief warns

Rents set to rise by up to 5% a year in Switzerland, says OFL Keystone-SDA

Swiss tenants face years of rising housing costs, with rents expected to climb 3–5% annually, the Federal Housing Office warned Sunday.

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Housing demand continues to outstrip supply. Without a fall in economic activity, we can expect rents to rise, says Mr Tschirren in an interview published by the NZZ am Sonntag. The tenants affected are those who are new to the housing market or who have to move house, he points out.

He explains this increase by the fact that the housing market is increasingly being used as an investment for capital. Added to this is the fact that building land has become scarce in Switzerland, he continues. “In the past, we could solve the problem of growing demand by putting land in building zones. Today, that’s no longer possible.

Fewer building permits

The Director of the OFL also notes that the number of building permits has fallen by almost a third since 2016 in Switzerland. “Construction activity has not yet fallen by the same proportion, but it will continue to fall”. He cites a study that points to objections and appeals as the main cause of obstacles to housing construction projects.

The study recommends limiting the right to object to those directly affected, says Tschirren. “In principle, the right to be consulted would be maintained”, but it would be more targeted in order to avoid projects being unnecessarily delayed or prevented for opportunistic reasons, he adds.

Introducing an obligation to pay costs or damages in the event of manifestly abusive objections could also be an effective means, he stresses.

As for a rent cap, as practised in Basel, Tschirren has mixed feelings: “Its impact appears ambiguous”.

From the point of view of the tenants’ association, he points out, the model has been a success, as unfair terminations have fallen, but at the same time, construction and renovation have suffered.

“The canton of Basel-Stadt has therefore had to adapt its regulations to make renovation more attractive,” he noted.

Translated from French with DeepL/ds

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