According to the study, moving is usually not financially worthwhile
Published: Tuesday, Nov 21st 2023, 08:10
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Tenants in Switzerland have no reason to move. There is a "stay bonus". Moving house, on the other hand, is associated with costs and usually results in higher rents.
Even if an apartment is no longer suitable in terms of size or location, tenants have a good reason to hold on to their apartment, writes Zürcher Kantonalbank (ZKB) in a study published on Tuesday.
This is due to asking rents, which have risen by almost a quarter across Switzerland since 2008. In contrast, existing rents have remained relatively stable. The latter are also protected by regulations and may only be adjusted in rare cases.
Existing tenants in the canton of Zurich save an average of 16 percent compared to new tenants, which equates to CHF 3,000 per year. In the city of Zurich, this "stay bonus" is even more pronounced at 26% or around 5,300. "Multiplied across all households in the city of Zurich, this results in total annual rental savings of CHF 1.1 billion, according to ZKB."
However, the city of Zurich is not the frontrunner. In Geneva, the bonus is as high as 54 percent. According to the study, there are total tenant savings of CHF 6.9 billion across Switzerland.
Zurich - the stronghold of long-term tenants ___
"Existing tenants increasingly find themselves in a golden cage," Ursina Kubli, Head of Real Estate Research at ZKB, is quoted as saying. In the city of Zurich, for example, the average tenant has been living in the same apartment for ten years; in 15 percent of cases, it is even twenty years.
This creates distribution problems: For example, 7 percent of all small rental apartments are overcrowded and, conversely, 65 percent of all large apartments are undercrowded.
However, moving to a smaller apartment is often associated with higher costs. Anyone who moved into a four-room apartment in the canton of Zurich 25 years ago would only get a two-room apartment for the same rent today.
Existing tenants will also have to adjust to rising costs - the reference interest rate is likely to be raised a second time in December (to 1.75%). However, this will make little difference to the significant difference to existing rents. This year, asking rents in the canton of Zurich are likely to rise by 5.5% and by a further 4.5% in 2024. Across Switzerland, the increase is likely to be 3.5 and 4 percent respectively.
The ZKB sees one possible solution in better framework conditions for residential construction: a growing supply would curb the increase in asking rents and thus also slow down the further drifting apart of asking and existing rents, according to Kubli.
©Keystone/SDA
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