The cost of renting a house or apartment in Switzerland has risen by 30 percent in 20 years, a new study by consultancy Iazi has revealed. As the Swiss housing market continues to tighten, especially since the recent rise in the reference interest rate, the study noted that salaries have failed to keep up with inflated costs.

Housing costs in Switzerland skyrocket since 2000

According to the report, released by Watson, the cost of both buying and renting a house in Switzerland has increased dramatically since the turn of the century. Between 2000 and 2021, the cost of buying an apartment increased by 94 percent on average, while house prices rose by 80 percent and the cost of renting rose by 30 percent.

This makes housing costs one of the biggest contributors to the rising cost of living, with other living costs only rising by 8 percent on average during the same period. Jobs in Switzerland have also been unable to compensate for rising housing costs, with nominal wages only increasing by 24 percent on average between 2000 and 2021.

Demand and Swiss salaries to blame for higher costs

Iazi noted that housing costs differ hugely by region, with prices for same-sized homes varying by up to 70 percent across the country. It also must be noted that the study did not take into account the recent rises in the reference interest rate - which increased rental costs for around half the renting population - or the excessive housing shortages recorded since 2021.

When it came to what caused prices to rise, Iazi said that one of the main factors was an increase in affluence across the country, which in turn led to an increase in demand for living space. Over the last 20 years, the average living space per person in Switzerland increased from 44 to 46 metres squared.

The local tax system and average incomes also have their parts to play in increasing housing costs. Iazi noted that low-tax areas tend to have the most expensive homes as they attract those with higher incomes who can afford to spend more on housing. This in turn raises demand and means landlords often choose to increase the asking rents for local houses and apartments.

High demand caused by immigration was also noted as a factor, especially in destinations popular with expats like Canton Zurich, Vaud and Geneva.