Rents rise in larger Swiss cities, but remain lower elsewhere

Lugano, the cheapest place in Switzerland for a family-sized apartment. © Keystone / Ti-press / Gabriele Putzu

Zurich and Geneva are the two most expensive cities in Switzerland for home rentals, with prices continuing to rise as people move from the smaller towns to big cities.

While Geneva is the most expensive place to rent big family apartments – a 4.5-room flat of 90-120 square meters costs CHF3,500 ($3,756) – Zurich is the priciest for two-room apartments (CHF1,650 per month), according to a report on MondayExternal link by comparis.ch, a price comparison website.

The difference could be explained by the numbers of people living alone. “While this has decreased in Geneva in the past years, it has gone up in Zurich”, said comparis.ch’s Leo Hug.

The report, which analysed changes in rents across the ten biggest Swiss cities over the past five years, also noted that the increase in price of medium to large apartments was biggest in Geneva: since 2017, 4.5-room flats went up by 4.2% to CHF3,500, while 3.5-room flats rose by 9.5% to CHF2,640.

Lucerne in central Switzerland saw the biggest increase when it came to two-room units, whose average price climbed by 4.8% to CHF1,300 per month.

Cheaper in Lugano

However, overall the picture is one of relative stability, with many of the ten cities showing either no change, or even falling rent prices. In Lugano in southern Switzerland, the rent for a 4.5-room flat dropped from CHF1,900 to CHF1,700 – less than half the price as in Geneva. It’s the cheapest place to rent a family-sized apartment in Switzerland.

For smaller flats, the most affordable place is the bilingual city of Biel/Bienne in the northwest, where a two-room goes for CHF985; five years ago it cost CHF1,000.

Hug said that “this evolution is mainly due to an exodus from small towns in favour of large urban centres” – a trend he said was confirmed by a population decline of 2.1% in both Lugano and Biel/Bienne over the past five years.

Rent isn’t everything

Internationally, Zurich and Geneva regularly feature on lists of the world’s most expensive cities: in the most recent “Worldwide cost of living” study by the Economist Intelligence Unit – which looks at living costs in general, not just rent – they are ranked fourth and seventh respectively.

However, when it comes to rent prices specifically, estimates an online comparisonExternal link by the HousingAnywhere group, the most expensive cities are Paris, London and Amsterdam. In the French capital, it claims, an average one-bedroom flat (the equivalent of a “two-room” in Switzerland) costs €1,964 (CHF2,045).

Meanwhile, with property prices for purchase on the rise in Switzerland over the past few years, and not just in major cities, authorities are concerned about an overheated market.  The Swiss National Bank estimates property is overvalued by 20%.

Last week, the government decided to reactivate a requirement for banks to set aside a capital buffer to help mitigate the increasing risk of mortgage loan defaults.