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RENTING

Swiss city Lucerne votes to restrict Airbnb rentals

The Swiss city of Lucerne voted Sunday to limit short-term rentals, including on the Airbnb platform, to a maximum of 90 days a year.

Swiss city of Lucerne
The Swiss city of Lucerne. Photo: Geertje Caliguire on Unsplash

Just over 64 percent of voters in the picturesque city in central Switzerland were in favour of the restriction tabled by the leftwing Social Democrats.

Backers of the initiative said it aimed to cap large-scale temporary rentals by commercial providers and to free up living space for residents of Lucerne, which is facing a significant housing crunch.

Opponents had warned it risked harming tourism in the city, which is one of Switzerland’s main tourist destinations.

The local government had presented a watered-down counter proposal, which would have restricted the percentage of short-term rentals within non-touristy neighbourhoods, but it failed to get sufficient backing.

The left hailed the vote, with the national Socialist Party’s co-president Cedric Wermuth describing it on Twitter as a “fantastic victory against the real estate lobby”.

With Sunday’s vote, Lucerne will become the latest of a number of European cities that have taken steps to limit the effect of the Airbnb home rental platform on the housing market.

In Switzerland, caps on short-term subletting to holidaymakers are already in place in the western regions of Geneva and Vaud.

Participation in the Lucerne vote, which was just one of a slew held on local and regional issues across Switzerland on Sunday as part of the country’s direct democratic system, stood at 34.6 percent.

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PROPERTY

Property prices in Switzerland set to become (slightly) more affordable

Home ownership in Switzerland is out of reach for most people, but there are changes afoot — at least in some regions - that could make it possible for more people to buy.

Property prices in Switzerland set to become (slightly) more affordable

At times, being a property owner in Switzerland is cheaper than renting, and at other times it is the opposite.

For instance, if mortgage interest rates are low and rents high, then buying a home makes better financial sense than being a tenant.

What is the current situation?

In the first three months of 2024, home owners have had a heavier financial burden than tenants of similar properties, according to a UBS study.

It shows that the annual cost for an owned apartment of four and a half rooms and 110 square metres of living space was 32,500 francs a year between January and end of March, while the annual rent for for a similar size flat amounted to 30,500 francs.

That is especially the case for owners who took out a long-term fixed mortgage when rates were at their highest, that is, well over 2 percent. 

For instance, a person who took out a long-term mortgage during this period would have to bear cumulative additional costs of almost 50,000 francs by 2033.

What lies ahead in terms of property prices?

Better news for prospective property owners.

Thanks to falling mortgage interest rates — due mostly to two key rate cuts still expected from the Swiss National Bank (SNB) — mortgages are now significantly lower than they were at this time in 2023.

Many are now below 2 percent and they are expected to drop further by the beginning of 2025, according to UBS’s forecast.

This is already the case in cantons of Bern, Solothurn, Aargau, Schaffhausen and Thurgau, as well as in certain areas of Vaud, Fribourg and Valais, where buying a home is also already cheaper than renting.

On the other hand, mountain regions will continue to be more expensive than most other parts of the country.

READ ALSO: Why luxury Swiss mountain resorts are becoming ‘lifeless’ 

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