According to the latest Real Estate Offer Index by IAZI, the cost of renting a house or apartment in Switzerland has risen significantly over the past month. Costs have risen in a majority of Swiss cantons, with Canton Zurich and central Switzerland seeing prices rise the fastest.

Record rental costs for Switzerland in October 2022

The Real Estate Offer Index - a real-time calculator of average rental costs in Switzerland - reached a new high at the end of October, hitting the highest level seen since measurements began in 2015.

IAZI found that the average cost of renting a house or apartment in Switzerland increased by 1,4 percent in October alone. The price quoted in rental contracts rose most dramatically in Zurich and areas of central Switzerland like Lucerne, where prices rose by 3,7 and 3,8 percent respectively.

Prices in eastern Switzerland (0,6 percent), Canton Vaud and Geneva (0,3 percent) rose more gradually. Finally, rental costs in northwestern Switzerland actually fell by 0,6 percent, with Canton Ticino seeing rents plummet by 2,9 percent.

Renters should expect prices in Switzerland to rise further in 2023

Speaking to SRF, real estate expert Martin Waeber said that tenants should be prepared for more price increases in the future. “Due to rising interest rates, the reference interest rate under tenancy law could be raised as early as spring 2023. This enables rent increases of up to 3 percent,” he explained.

Waeber added that the large number of jobs available in Switzerland - more than a quarter of a million vacancies were recorded in the third quarter of 2022 - is also putting excessive strain on the housing market. He argued that the large number of expats and internationals relocating to Switzerland to fill the vacant roles will make prices rise even further, especially in the cities of Geneva and Zurich. A recent study by the city council of Zurich found that rental costs in some areas of the city have risen by 40 percent since 2000.

According to SRF, despite there being a high risk of a housing bubble in Zurich and other cities, a large price correction in the Swiss housing market is not expected in the future. In the words of the national broadcaster, “The excess demand just seems too big for that.”