Homes in Zurich, which has seen the strongest annual increase in rents
Keystone / Steffen Schmidt
Housing is becoming increasingly expensive in Switzerland. Rents rose in almost all municipalities in Switzerland in the third quarter. This was strongest in the Zurich area.
In contrast, the upward price trend for residential property has slowed somewhat.
In around 85% of Swiss municipalities, rents for medium-quality flats rose by a good 3% in the third quarter of 2023 compared to the previous year, according to a Swiss Real Estate study published by bank UBS on Thursday. This corresponds to the strongest average increase in asking rents since 2008.
Among all municipalities with at least 2,500 inhabitants, the city of Zurich recorded the strongest annual increase in rents at almost 11%, according to the report. Rents in Gossau and Herrliberg rose by a similar amount. In western Switzerland, rents rose the most in Genthod, increasing by over 10%.
Slowdown in the owner-occupied property market
According to the study, owner-occupied home prices in the third quarter of 2023 were also a good 3% higher on average across all municipalities than in the previous year. However, in contrast to the rental property market, the price trend has slowed compared to previous years. The pandemic-driven boom is therefore likely to have come to an end, according to UBS. In 2021 and 2022, home prices still rose by an average of almost 7% and 6% respectively.
Compared to the end of 2019, so before the outbreak of the Covid pandemic, home prices for properties of average quality rose the most in Arosa (55%). Prices in Klosters also rose by more than 50% in the same period. The Zug municipality of Walchwil followed in third place. Echandens in the Lausanne agglomeration recorded the highest price increase in western Switzerland at 45%.
UBS expects the existing trends to continue in the coming quarters, both on the rental flat market and on the owner-occupied property market.
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