Due to a large rise in the price of crude oil and natural gas, those who rent a house or apartment in Switzerland and pay for their utility bills should expect to pay an additional 500 Swiss francs a year to heat their home. For those who do not pay for their heating, rents are also expected to rise significantly, but only in 2024.

Heating costs for houses in Switzerland to rise dramatically

Experts at Credit Suisse have warned that they expect heating costs to rise by almost 40 percent over the next year. They said that tenants whose apartments are heated by heating oil or natural gas - which accounts for 60 percent of Swiss households - will be affected the most.

For an apartment of 100 square metres, the Swiss bank estimated that heating costs will increase by more than 500 Swiss francs a year by the end of 2022. They noted that the extreme prices for fossil fuels could force energy providers and landlords to switch to renewables to heat homes, as currently, the cost of running renewable heat pumps is only set to increase by 20 francs a year.

Tenants should expect increased rents in Switzerland

For those who do not pay their heating bills directly, tenants should expect rents to rise significantly, but only in the next two years. Landlords can only increase rents if the reference interest rate set by the Swiss National Bank rises - something that has not happened yet.

In Credit Suisse’s most likely scenario, it predicted that the reference interest rate will increases in the middle of 2024, with rents rising significantly when rental contracts are renegotiated at the end of the same year. In its worst-case scenario, renters should see increased costs by the beginning of 2024.

End of low-interest rates set to radically change Swiss housing market

In concluding its report, Credit Suisse said that the rising cost of utilities and the imminent end of low-interest rates for mortgages will change the Swiss housing market dramatically. Accompanied by higher heating costs, higher rents and the addition of expensive mortgages, the bank noted that housing in Switzerland is set to become a far less attractive investment than it once was.