Rise in Swiss asking rents continues
The increase in asking rents in Switzerland continued in May. At the cantonal level, too, all cantons but one increased. At the same time, asking rents in most of the cities surveyed rose more strongly than in the associated cantons. This is shown by the current figures from the Homegate rent index.
The Homegate rent index for asking rents is compiled by the real estate marketplace Homegate in cooperation with Zürcher Kantonalbank (ZKB). It measures the monthly, quality-adjusted change in rents for new and re-let flats based on current market offers. Compared to the previous month, the index increased by 0.5 points in May and now stands at 121.2 points (plus 0.4 percent). Compared to the previous year, asking rents rose by 3.1 per cent across Switzerland.
Change in the cantons
With the exception of the canton of Fribourg (minus 0.2%), asking rents also rose everywhere at the cantonal level. However, the canton of Fribourg recorded a new high in April and March this year, which puts the slight decline in May into perspective. In the remaining cantons, asking rents rose by up to 3.6 per cent in the canton of Schwyz, which clearly reached a new high. The coming months will show to what extent this is a temporary effect. In the cantons of Uri (2.6 per cent), Nidwalden (2 per cent) and Zug (1.9 per cent), asking rents also rose significantly last month. At the same time, the canton of Zug was the only canton to record a negative development compared to the previous year (minus 1 per cent), which can primarily be explained by the comparatively strong fluctuations in asking rents in this canton. The strongest increases in asking rents over the last twelve months were in Uri (7.8 per cent) and Schwyz (6.9 per cent). This is accompanied by fluctuating, but nevertheless rising prices.
Change in the cities
A similar picture emerges at the level of the cities surveyed. With the exception of the city of Bern (minus 0.3 per cent), prices for advertised rental flats have risen between 0.5 per cent (Basel) and 1.6 per cent (Zurich). Compared to May last year, asking rents have risen by more than one per cent in all eight cities surveyed, led by Zurich (10 per cent) and Lugano (7.7 per cent). When looking at the asking rents in the cities, it is also noticeable that most of them rose more strongly in May than in the corresponding cantons. The only exceptions are Bern (with falling asking rents in May at city level) and Lucerne (cantonal prices rose by around twice the city prices). This indicates that urban demand remains high.
Quality adjustment method
The development of asking rents in Switzerland is adjusted for the different quality, location and size of the flats. The advantage of this so-called hedonic method is that the real rental price development for new and re-let flats is shown on Homegate. The Homegate rent index is the oldest quality-adjusted rent index in Switzerland and is considered a reference source for real estate professionals for determining the price of rental properties.
The data for all cantons and cities since the start of the survey can be found in the latest release in the news section of SMG Swiss Marketplace Group AG. The next Homegate Rental Index is expected to be published on 18 July 2023.