When it comes to rents, everything will remain the same for the time being. But rising prices are certain, explains the real estate expert.
In June, the reference interest rate rose again for the first time in years. A further increase before the end of the year seemed likely. Now, however, the competent Federal Housing Office (BWO) has left the mortgage reference interest rate at 1.5 percentage points for the next three months. A trend reversal or just a short breather? The expert classifies.
Ursina Kubli
Head of Real Estate Analytics ZKB
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The economist has been studying the Swiss real estate market for Zürcher Kantonalbank (ZKB) since 2017. Prior to that, she worked for around ten years at Bank J. Safra Sarasin, which she joined from the Economic Research Center at ETH Zurich (KOF).
SRF News: How did the current zero round come about?
Ursina Kubli: It is not surprising that there was no increase. Because the reference interest rate is sluggish. Nevertheless, we just barely missed an increase. The threshold for an increase was 1.62 percent – the average rate on domestic mortgage loans has risen from 1.44 to 1.59 percent over the past three months.
What is the calculation of the reference interest rate based on?
The average mortgage interest rates that mortgage holders have at domestic banks are decisive.
We expect the next adjustment in December. And this should not have been the last increase.
What will tenants have to prepare for in the future?
The trend is clear: the reference interest rate continues to rise. We expect the next adjustment in December. And this should not have been the last increase.
Is there such a thing as a realistic upper limit? In 2008 the reference interest rate was 3.5 percent?
Theoretically, there is no upper limit. Just as a comparison: in the 1990s, mortgage interest rates were at times seven percent. However, this is not to be expected. But one thing is clear: the days of negative interest rates are over.
How can I calculate whether and how much the rent for my apartment could increase in the coming years?
If the rental agreement is based on a reference interest rate of 1.5 percent, the landlord can increase the rent by three percent if the reference interest rate is adjusted by 0.25 percentage points. But that’s not all. In addition, the increased inflation can also be charged at 40 percent. Added to this are general cost increases of 0.5 percent per year. In combination, this meant increases of up to seven percent for numerous tenants last time in June.
Housing construction must be accelerated again.
The think tank Avenir Suisse writes that exorbitant rents are a myth. What do you think?
It is true that the average proportion of housing costs is not exceptionally high. In my opinion, however, the average is not a suitable measure in this respect. Because you always have to think about the lower income brackets. These not only affect the current rent adjustments, but also the increased ancillary costs.
Where is the Swiss rental market headed?
I fear the current situation will worsen. Building permits are declining, while demand remains high. Housing construction must be accelerated again. Looking at the reference interest rate, it is clear: the more it rises, the more tenancies are affected where a rent increase may be enforced.
Patrick McEvily conducted the interview.
