SHARE
COPY LINK
For members

RENTING

How much will your rent in Switzerland rise by if you move house?

Housing costs are notoriously high in Switzerland, and moving to another flat won’t necessarily help you save money — in fact, you could end up paying more.

How much will your rent in Switzerland rise by if you move house?
Check the old rent before signing on for the new one. Photo: Pixabay

There is an unwritten rule in Switzerland that rent should not exceed one-third of income.

However, according to a new study conducted by the real estate company Wüest Partner, after a move to a new apartment, even a smaller one, a large portion of tenants are paying much more to cover the cost of new digs.

The study found that, on average, 28 percent of households spend more than a third of their income on rent after moving.

Why is that?

If you are looking for a new apartment and think that a smaller one will be cheaper, that is often not the case.

“A four-room apartment does not necessarily cost twice as much as a two-room apartment,” said Robert Weinert, head of immo-monitoring ar Wüest Partner Wüest Partner.

One reason is the persisting — and, in some cases, worsening — housing shortage.

Another is that when an old tenant moves out and a new one arrives, landlords have the right to increase the rent by up to 10 percent.

As a result, many older people, who find themselves alone after the children move out, live in large apartments they have had for many years.

For this very reason, the living space per person increases sharply from the age of 55 — these tenants live alone or with a spouse in their old apartments, which were previously occupied by three, four or five people, Wüest Partner said.

READ ALSO: Can you really save money on rent if you move into a smaller flat in Switzerland? 

Where do new tenants spend more than one-third of their income on rent?

Wüest Partner’s analysis found that this is especially the case in canton Geneva, where 56 percent of tenants see their rents exceed one-third of their earnings.

Zug is next with 40 percent, followed by Zurich and Vaud (36 percent), and Ticino (31 percent).

When looking at individual cities rather than cantons, this trend is most evident in the five largest cities — Basel, Bern, Geneva, Lausanne and Zurich —where a four-room apartment in an older building costs on average around 1,900 francs per month with existing rental agreements.

If an apartment of this type is put on the market today, however, the rent will rise to 2,300 francs on average.

Landlords must show you the previous rent upon request, so you can compare the numbers before you sign the contract.

What if your new rent is more than 10 percent higher?

The most logical move is not to rent the apartment in the first place.

If you are already a tenant, you have the right to challenge an excessive rent, by reporting it to the Federal Housing Office (BWO) by a registered letter, but you must do so within 30 days of signing the lease. 

You have to explain why you signed the contract, knowing the rent was excessive. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

RENTING

EXPLAINED: Are you entitled to rent reduction in Switzerland right now?

The Swiss National Bank (SNB) announced on Thursday its second interest-rate cut of 2024. Does this mean some financial relief for tenants?

EXPLAINED: Are you entitled to rent reduction in Switzerland right now?

After cutting the interest rate in March from 1.75 to 1.50 percent, Switzerland’s central bank slashed the rate by another quarter percent to bring it down to 1.25. 

The law of economics, at least in Switzerland, dictates that when the rates are cut, rents will fall as well.

That is because most rents in Switzerland are based on the so-called reference interest rate, which is set by the Federal Housing Administration.

It is an average of all interest paid on mortgages in Switzerland. These, in turn, are based on the SNB’s key interest rate.

As a rule, if the reference rate falls by 0.25 percent — as is the case now —tenants are generally entitled to lower rents.

According to Freddy Hasenmaile, chief economist at Raiffeisen Bank, “the bottom line is that this should slow the growth of existing rents somewhat.” 

When will this rent reduction go into effect?

Unfortunately, this doesn’t happen overnight.

Since long-term fixed-rate mortgages are also included in the calculation, it takes time for the reference interest rate to fall.

When that happens however — likely within the next few months — tenants will be entitled to rent reductions, provided the landlord had raised their rents when reference rates increased in the past.

Be proactive

Ideally, when the rates fall and tenants are entitled to have their rents lowered, the landlord should do this automatically.

But that is not always the case.

That is why it behooves tenants to take this matter into their own hands.

In all, an estimated 2.2 million households in Switzerland can apply for a rent reduction.

To make this process easier, the Swiss Tenants Association has prepared a sample form which can be filled out and sent to the landlard or management company. 

Can the landlord refuse your request for rent reduction, despite lower interest rates?

Yes.

According to Comparis consumer platform, the landlord could refuse to reduce your rent on grounds including value-enhancing works done to the property, higher operating costs due to inflation, or general increases in running expenses.

He or she can also say (and must prove) that the current rents are within the range of other comparable properties in the area.

Can you dispute this decision?

If you have valid reasons to do so, then yes.

For instance, landlords are allowed to  charge a maximum of 0.5 percent of the net rent to cover increases in operating and maintenance costs. 

Also by law, property owners may only pass on to tenants up to 40 percent of the inflation accumulated since the last rent adjustment.

If you have prove that these figures are exceeded, then you can file a complaint with your local conciliation authority. 

READ ALSO: How to solve a dispute with your Swiss landlord 

SHOW COMMENTS