According to a new study by the ZKB, tenants in Switzerland have no reason to move. There is a “stay bonus”. Changing apartments, on the other hand, involves 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 the Zürcher Kantonalbank (ZKB) in the study.
Legend: A block of flats in Schwamendingen. Anyone who wants to leave him should think carefully about it. KEYSTONE/Martin Ruetschi
The reason is the asking rents, which have risen by almost a quarter across Switzerland since 2008. In contrast, existing rents remained relatively stable. The latter are also protected by regulations and are only allowed to be adjusted in rare cases.
Existing tenants in the canton of Zurich saved an average of 16 percent compared to new tenants, which corresponds to 3,000 francs annually. In the city of Zurich, this “stay bonus” is even more pronounced at 26 percent or around 5,300 francs. Multiplied across all households in the city of Zurich, this results in a total annual rental savings of 1.1 billion francs, according to ZKB.
However, the city of Zurich is not the front runner. In Geneva the bonus is as high as 54 percent. According to the study, there are rental savings totaling 6.9 billion francs across Switzerland.
Zurich – the stronghold of long-term tenants
“Existing tenants are increasingly finding themselves in a golden cage,” says Ursina Kubli, head of real estate research at ZKB. In the city of Zurich, for example, a tenant has been living in the same apartment for ten years on average; for 15 percent it is even twenty years.
This causes distribution problems: 7 percent of all small rental apartments are overcrowded and, conversely, 65 percent of all large apartments are underoccupied.
But 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 would also have to prepare for rising costs – the reference interest rate is likely to be raised a second time in December (to 1.75 percent). However, this will do little to change the significant difference to existing rents. This year, asking rents in the canton of Zurich are expected to rise by 5.5 percent and by another 4.5 percent in 2024. Across Switzerland, the increase is likely to be 3.5 or 4 percent.
The ZKB sees a possible solution in better framework conditions for housing construction: a growing supply would dampen the increase in asking rents and thus also slow down the further divergence between offered and existing rents, says Kubli.