Expats Cause Swiss Rents to Climb
Last year the average rent charged for apartments in Switzerland rose by 2.3 per cent as a steady influx of foreign workers increased demand.
Now real estate consultants Wüest & Partner have asserted that rent will continue to rise, perhaps increasing by as much as 1.6 per cent this year.
In the property market report Wüest & Partner noted: ‘The Swiss economy is currently on a moderate – but in an international comparison solid – growth path [...] the Swiss economy is expected to gain momentum in 2014.’
Given the economic troubles affecting many of its neighbouring Eurozone nations, Switzerland has emerged as something of a safe-haven, attracting thousands of people looking to improve their employment prospects.
As Wüest & Partner state: ‘Asking rents and rents under new lease agreements [...] have risen by 25 and 13 percent respectively since 2005. Inward migration from abroad, which remained at a persistently high level in 2012, continues to represent the main driver for residential demand. In the coming months, largely similar market dynamics are likely to prevail.’
The asking price of single family homes is also on the up, as an increasing number of expats invest in the relatively healthy Swiss housing market. As Wüest & Partner points out: ‘Single-family house prices increased in all cantons last year; in the first quarter of 2013 the Swiss asking price index continued to rise – albeit at a slower pace than previously observed. With prices having reached a level that is unaffordable to an increasing number of buyers, the focus of demand is shifting towards well-developed secondary housing markets.’
However, the real estate consultants went on to say that although rental prices will continue to increase over the course of this year, rises will occur at a slower rate as a result of an expansion in home construction in Switzerland.
In the Wüest & Partner’s Swiss property market report they assert that continuing high levels of immigration would trigger even steeper rent increases if more properties weren’t being built to refurnish supply, asserting: ‘building activity in the Swiss residential market is still strong: At the end of 2012, some 75,600 units were under construction, which represents a 2.5 percent increase on the previous year. As such, rising supply levels are likely to slow the pace of rental growth.’