immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Miete

  • Affordable living in Zug

    Affordable living in Zug

    The canton of Zug and the city of Zug suffer even more than other cantons and cities from a lack of living space. The canton of Zug has the lowest vacancy rate in the country at 0.2% for the fourth year in a row. The lack of supply and the persistently high demand are leading to strong competition for the few advertised rental flats: the re-letting period is record-breakingly short. There are plenty of affluent tenants moving in and out who are prepared to pay ever higher rents¹.

    Because asking rents are now 50% higher than the Swiss average, complaints that rental flats are no longer affordable have spread far into the middle classes². Even those with normal household incomes who want to move or relocate to the canton have little chance of accessing the housing on offer.

    In this context, the question arises as to what profit-orientated owners who have or would like to develop housing stock in the canton and city of Zug can contribute to the provision of housing for broad sections of the population.

    How should affordable housing be defined?
    The first question is how “affordable” housing should be defined. There is an object-orientated, a market-orientated and a target group-orientated approach³. Affordable housing can be defined as housing rents that are calculated using the maximum fixed investment costs for a residential property. For this calculation to work for yield-orientated owners, a consensus is needed on what constitutes a sensible limit for investment costs. The market-oriented approach categorises low-priced residential rents in certain quantiles of market rents. This requires a consensus on which quantiles are affordable. Finally, affordable housing rents are defined as those that are financially viable for tenants. This requires a consensus that households should not spend more than a third of their gross income – or more generously, their taxable income – on rent, for example.

    Room for manoeuvre via the subject-oriented approach
    The approach based on financial affordability is the most meaningful for a broad-based housing supply. Unlike the approach based on investment costs, this approach recognises that many people in the canton of Zug earn more than in other cantons and can therefore afford higher rents (Fig. 1). However, unlike the approach using the quantiles of market rents, it is not based on the willingness to pay of those moving in and out, but on the real income of the population. This approach helps to target the needs of specific income groups.

    An affordable flat for a person from the lower middle class living alone, who earns between 70 and 100% of the median income, should therefore cost between CHF 1,400 and 1,900 in the city of Zug. How much living space is offered for the price is decided by the provider based on his assessment of the marketability of a flat. Because affordability is based on the unit price of the flat and not the price per square metre, yield-oriented investors have more leeway to integrate affordable housing into their profitability calculations.

    Optimising the distribution of existing affordable housing
    Building flats takes a long time and is often associated with uncertain planning processes. Owners and investors are also not free to decide where and how much additional living space they want to realise. Owners have direct options for action with their portfolio: they can contribute to supplying the wider population if they optimise the distribution of their vacant rental flats. Every change of tenant offers the opportunity to consider the most suitable tenant in line with the “best owner principle”. Owners can instruct lettings teams to maximise the affordability of rental properties that are affordable to the middle class and choose the tenant who can least afford the property – assuming a full salary, for example. Letting teams simply need a matrix that shows them the maximum rental prices affordable for the middle class (or the targeted income group) for each number of rooms. If a vacant flat in the corresponding price range becomes available, the rule would apply.

    Conclusion
    In order to ease the situation in the housing market, the lengthy tasks of reducing barriers to housing construction and developing a cross-party understanding of how affordable housing is defined and how its provision should be regulated must be tackled. In the meantime, yield-orientated owners can make a contribution by approaching the provision of affordable housing with a subject-orientated approach that fits into their market logic. In doing so, they also remain fair to the legitimate interests of their direct stakeholders.

  • Housing affordability in Switzerland

    Housing affordability in Switzerland

    The average rent burden of all households in Switzerland is between 17% and 27.8%, depending on the definition of the ratio approach. The analysis shows that the assessments of the unaffordability of housing vary considerably depending on the measurement approach chosen: The proportion of households for whom housing is unaffordable ranges from 6.7% to 26%. These differences emphasise the need for a differentiated view of the housing cost burden.

    Influence of income class and household type
    The differentiation of households by income class and household type has a considerable influence on the rent burden. Households in the lowest income quintile spend up to 51% of their disposable income on gross rent, while households in the top quintile pay a maximum of 17.2%. Single households over 65 in the lowest income quintile are particularly badly affected, with a rent burden of up to 64%.

    Ratio approach as the preferred method
    The ratio approach, which measures the housing cost burden as a proportion of income, is considered more practicable than the theoretically optimal residual income approach. The differentiated ratio approach, which varies by income class and household type, allows a more accurate assessment of housing affordability and is more applicable than pure rental cost benchmarks. Granular data on population, income and housing support this differentiated analysis.

    Need for a clear definition and further research
    The concept and objectives of affordable housing planning must be clearly defined. Owners and developers can only create targeted offers if precise thresholds for different household types and income brackets are available. Future research should focus on determining appropriate thresholds and clarifying which specific components of housing costs and income should be considered in the affordability analysis.

    Optimising pricing to encourage investment
    Differentiated pricing based on actual incomes can reduce vacancy and letting risks and encourage investment in new housing. The application of a differentiated ratio approach provides a solid basis for assessing housing affordability in Switzerland and contributes to the creation of sustainable and affordable housing.

  • Majority do not want to reduce living space

    Majority do not want to reduce living space

    The study ” Living space utilisation from an individual perspective ” conducted by the Zurich University of Applied Sciences(ZHAW) revealed that 70 percent of those surveyed are not prepared to downsize their living space. Among those living in so-called empty nests, i.e. with empty rooms of fledged children, only 26 per cent feel that their home is too big. An excess of two rooms, i.e. two more rooms than the number of people living in the household, is considered ideal by the respondents, according to a statement from the ZHAW. According to the study, only 42 per cent of respondents willing to move are prepared to reduce the number of rooms. 32 per cent do not want to deviate from their expectations regarding housing costs.

    “It turns out that the combination of moving and downsizing – i.e. two drastic changes at the same time – is particularly challenging,” Selina Lehner, co-head of the study, is quoted as saying. “If there is also a lack of important incentives, this decision is often postponed.” Only one in three people surveyed believe that older couples or single people in flats that are too large should give up their living space for younger families. According to the ZHAW, the fact that the new rent for smaller flats is often more expensive than the existing rent in the larger flat plays a role here.

    The home office is gaining in importance. 61 per cent of those surveyed stated that they wanted to set up a home office in the future. This is because “an external office, for example, is not as attractive as an office within your own four walls,” says study co-leader Holger Hohgardt.

    A total of 1097 people in German-speaking and French-speaking Switzerland took part in the study in spring 2024. The ZHAW conducted the survey in collaboration with the Federal Office for Housing, the Fédération Romande Immobilière, the Swiss Homeowners’ Association and Raiffeisen Switzerland.

  • Revolutionary investment strategy for commercial rental deposits

    Revolutionary investment strategy for commercial rental deposits

    At a time when the focus is on adding value to capital, the new solution brings a breath of fresh air to the management of rental deposits. The innovative solution, which was developed in collaboration with leading asset managers and banks, enables companies to invest their rental deposits efficiently while providing the necessary security for landlords.

    The CEO: “It’s time for capital to work for the company and not destroy value over time. With our solution, companies can quickly move from costly rental deposits to profitable investments.”

    A 1999 study by the Federal Office for Housing states: “For the tenant, rent deposits are de facto a kind of “forced saving” on terms that he cannot influence. It is therefore appropriate to look for a new alternative to rent deposits”.

    Traditionally, rent deposits have been seen as a cost for companies that primarily ties up liquidity. Now, companies can seamlessly transition from cost to revenue. The ability to quickly and easily convert rent deposits into secure and profitable investments dusts off the previous understanding of antiquated deposit accounts and allows them to shine in a new light. The company provides both tenants and landlords with a smart match tool.

    According to a study conducted by the Federal Housing Office in 1999, rental deposits were previously regarded as an inflexible form of compulsory savings without tenants having any influence.

    In order to be able to offer the best possible investment strategy for rental deposits, the company co-operates with renowned partners in the field of custodian banks and asset management.

  • Einschätzung des Zinsmarktes durch Avobis

    Einschätzung des Zinsmarktes durch Avobis

    Die aktuellen Daten zur Inflation zeigen eine Kerninflation von 1,50%, was als positives Zeichen gesehen wird. Miet- und Energiekosten tragen wesentlich zu den jüngsten monatlichen Anstiegen bei, wobei Mieten sowohl im Quartals- als auch im Jahresvergleich gestiegen sind. Zukünftige Auswirkungen von Mietpreisanpassungen, die durch den im Juni 2023 aktualisierten hypothekarischen Referenzzinssatz verursacht wurden, werden ab November sichtbar sein.

    Das Bundesamt für Wohnungswesen hat bestätigt, dass der Referenzzinssatz im September bei 1,50% bleibt. Dennoch könnte eine Erhöhung des Durchschnittszinssatzes auf über 1,625% im Dezember zu weiteren Mietpreisanstiegen und damit zu Inflationsspitzen im kommenden Jahr führen.

    Die verzögerten Auswirkungen der Geldpolitik werden zunehmend spürbar, insbesondere auf dem Arbeitsmarkt der Schweiz, wo die Arbeitslosigkeit allmählich ansteigt und die Zahl der offenen Stellen abnimmt.

    Die Quartalsdaten für das zweite Quartal zeigen im Vergleich zum starken ersten Quartal (+0,90%) nur ein geringes Wachstum von 0,02%. Die SECO erwartet dennoch ein positives Wirtschaftswachstum für das Jahr 2023 und einen kontinuierlichen Rückgang der Inflation. Diese Trends untermauern die Erwartung, dass keine weiteren Zinsanpassungen durch die SNB erforderlich sind.

    Die Swapkurve hat sich im Vergleich zum letzten Monat abgeflacht und zeigt weiterhin eine gewölbte Struktur. Die kurzfristigen Swapsätze deuten auf eine geringe Chance für eine Zinserhöhung im September hin.

    Prognose von Avobis
    Es erscheint sehr wahrscheinlich, dass die SNB den Leitzins in der kommenden Sitzung am 21. September unverändert lassen wird. Der Einfluss von Mietpreissteigerungen auf die Inflation bleibt eine Variable, die genau beobachtet werden sollte. Falls bis zum Jahresende keine besorgniserregenden Inflationsanstiege festgestellt werden, könnte die Zinskurve eine inverse Struktur annehmen.

  • Supply rents rise

    Supply rents rise

    The monthly rental index compiled by the digital real estate marketplace Homegate in cooperation with Zürcher Kantonalbank closed at 122.4 points in July. Compared to the previous month, the index increased by 0.6 points or 0.5 percent, SMG Swiss Marketplace Group AG informed in a press release. Compared to the previous year, asking rents rose by 4 per cent across Switzerland. There is a pause in the increase in the canton and city of Zurich. However, both show increases compared to the previous year.

    In July, asking rents rose the most in the cantons of Basel-Stadt, St.Gallen and Vaud, by 0.8 per cent each. There was no increase of more than 1 per cent in any canton. Asking rents in the canton of Zurich were below the national figure with an increase of 0.2 per cent.

    Only six cantons showed a decrease in asking rents, led by the cantons of Schwyz (1.9 per cent) and Graubünden (1.3 per cent). Compared to the previous year, however, asking rents have risen across the board, including in Zurich by 6.1 per cent. And the canton of Schwyz also shows a clear increase over the last year (6.4 per cent).

    The Swiss cities surveyed show that asking rents for the city of Zurich did not change in July. Nevertheless, they have risen significantly by 10.1 per cent compared to the previous year. The other cities also show increases in asking rents of between 2.2 per cent in Lucerne and 7.8 per cent in Lugano compared to July 2022. In July, asking rents rose everywhere except in the city of Zurich, with the largest increases in Lucerne (1.7 per cent) and St.Gallen (1.2 per cent).

    The next Homegate rent index is expected to be published on 14 September.

  • Raiffeisen has bad news

    Raiffeisen has bad news

    The increase in rents in Switzerland is likely to continue to gain momentum. The increases following the hike in the reference interest rate at the beginning of June will take effect at the beginning of October. But that was just the beginning, according to a study by Raiffeisen on Thursday.

    There is “fire in the roof” for rents, the real estate experts write. The next increases in the reference interest rate are already in sight. “The reference interest rate is expected to rise to 1.75 per cent in December. This would mean that the majority of Swiss tenants would be threatened with another rent increase on 1 April 2024. According to the interest rate scenario, a further increase would then only be possible at the end of 2024 or beginning of 2025.

    Two-thirds affected in second round
    While in the current round of increases, it is estimated that just under half of all tenants are potentially affected, after the second reference interest rate increase, there should be potential for increases in around two-thirds of all tenancies, it continues.

    And the increases will be clearly above the planned 3 per cent. The landlords also pass on part of the accumulated inflation to the tenants and claim the general cost increases. An exact forecast is fraught with great uncertainty in the absence of experience with such a situation. But the experts expect that in the course of the next year, with the second increase in the reference interest rate, the rent increase throughout Switzerland is likely to climb to 8 per cent at times.

    But it is not only the increases that are driving rents. The prerequisite for landlords being able to push them through at all is above all the continued high demand and the scarce supply. “The demand for rental flats continues to increase strongly in rapid steps due to dynamically growing immigration,” the study states.

    Recordnetimmigration
    The experts believe it is possible that net immigration this year will even break the previous recordbalance of2008. “By May 2023, the net migration of the foreign resident population in Switzerland was a quarter higher than in the comparable period of the previous year.” And this does not include the Ukrainian refugees in the country, who are often supported by the municipalities in their search for housing on the open market.

    In addition, there are other effects, such as a high number of new households or the influence of the trend towards home offices. This increases the demands on the housing situation.

    No improvement in supply in sight
    The rental housing market is increasingly drying up. Vacancy rates are low, especially in urban centres, and asking rents are rising.

    There are hardly any signs of supply-side relief of the housing shortage. Although the number of building applications submitted for flats has at least stabilised in recent quarters, the urgently needed construction offensive is still a long time coming. “The thin project pipeline is far from sufficient to satisfy the current strong additional demand for housing.

    Subsidies for housing construction or individual subsidies
    In this context, the Raiffeisen experts also take a critical look at the demands for stronger subsidies for non-profit housing construction. This also costs a lot of money, they say, and needy tenants do not always live in municipal or cooperative housing. According to the authors of the study, about half of the residents of cooperative flats have such a high income that they do not need the subsidies.

    The strong reduction in the price of these flats leads to certain false incentives. Households that benefit from these low rents have little interest in leaving this flat later, even if their living conditions change. Raiffeisen writes that the question is whether subject-specific support – i.e. direct support for households in need – would not ultimately achieve more desirable results.

  • Office LAB becomes a new tenant in Konnex Baden

    Office LAB becomes a new tenant in Konnex Baden

    On behalf of the co-ownership, SPGI Zurich has rented additional space in the Baden connection . The Zurich company Office LAB will move into a total area of over 2800 square meters from January 2024, according to a press release . Then the provider of coworking offices will also take over the entire conference and event management for the Konnex building complex in the center of Baden.

    Office LAB has been using 800 square meters in connection with sub-letting since August of this year. The Zurich company offers office solutions for individuals and companies. These receive access to the coworking spaces in the form of day passes or fixed team offices. So far, Office LAB operates six locations. With the new location, the company is strengthening its already established presence in Baden.

    The Konnex building complex at Brown Boveri Strasse 7 is currently being completely renovated. A “city within a city” offer will be available there by mid-2023. A total of around 35,000 square meters of space will be rented for this purpose.

  • Investors are lining up for key properties

    Investors are lining up for key properties

    The real estate market in 2021 was turbulent for investors. This is how the real estate market report 2022 from CSL Immobilien summarizes the situation in the past year. Prices for central locations reached record highs. Yields fell accordingly.

    In a press release , CSL Immobilien cites the “Zurich Gold Coast community” Zumikon as an example of bidding processes that drive prices for office and residential buildings well connected to city centers to new record highs. There, the community had an empty fire station building next to a public transport station estimated at 8.7 million francs. It was sold for around 21 million Swiss francs. But first-class real estate “still has no alternative”, CEO Yonas Mulugeta explains this development, which can be observed in the centres.

    The periphery, on the other hand, is seeing rising vacancies: in the past six months, the office space on offer in the greater Zurich area has increased to 910,000 square meters (previous year: 812,000 square meters) or by 12 percent. The same can be seen in the economic areas of Berne (+14 percent) and Geneva (+12 percent).

    This price development led to new lows in net initial yields in most segments of the investment market last year. A sideways movement was expected. Residential properties of first-class quality yielded a national average of 1.9 percent compared to 2.35 percent in the previous year. At 1.9 percent (previous year 2.35 percent), top office properties fell to the level of residential properties.

    Private individuals had to dig deeper into their pockets to buy their own homes. Due to the pandemic, there was also an increase in demand for large rental apartments that also offer space for working from home. Accordingly, the proportion of vacant 1 to 2.5 room apartments in the canton of Zurich rose to 27 percent (previous year 22 percent). Viewed across the country as a whole, the vacancy rate fell to 1.54 percent (previous year: 1.72 percent).

  • Apartment rents and prices rise towards the end of the year

    Apartment rents and prices rise towards the end of the year

    A stiff breeze was blowing against those looking for accommodation in November. With an increase of 1.5 percent, the rents advertised have increased significantly across Switzerland. This difference is put into perspective, however, by looking at the longer-term development: over the past twelve months, the change is much more moderate at 1.0 percent. This is shown by the Swiss Real Estate Offer Index, which is collected by ImmoScout24 in cooperation with the real estate consultancy IAZI AG.

    The drivers of the rent increase in November are the Greater Zurich Region and the Central Plateau, each with an increase of 0.6 percent. Due to their market size, they have a disproportionately large impact on the Switzerland-wide rent index. Rents have also risen in Central Switzerland (0.6 percent) and in Eastern Switzerland (0.4 percent). Virtually no changes can be observed in northwestern Switzerland (0.2 percent) and in the Lake Geneva region (0.0 percent), while rents in Ticino have fallen (−0.4 percent).

    More expensive condominiums, stable house prices
    Those who want to buy a condominium were faced with 0.6 percent higher prices in November than in the previous month. This means that the national average price per square meter is currently around 8030 francs. For a typical apartment with 110 m² of living space, 880,000 francs are required. The asking prices for single-family houses (0.1 percent) hardly changed in November, which corresponds to a square meter price of around 7130 francs. A typical house with 160 m² of living space is advertised for 1,140,000 francs.

    «The new corona wave should temporarily support the trend of rising property prices, since in the fragile economic environment hardly any rate hikes on the part of the central banks are to be expected. The duration of this policy, however, depends heavily on the further development of consumer prices, which have recently risen significantly, ”says Martin Waeber, Managing Director Real Estate, Swiss Marketplace Group.

  • Rental prices drop slightly in March

    Rental prices drop slightly in March

    The prices for rents fell in March compared to the previous month by 0.4 percent. This short-term development is only reflected in the national averages. In the most expensive and densely populated regions, rents rose in March, according to the latest data from the Swiss Real Estate Offer Index. In the long term, too, prices have increased on average.

    Tenants in the Lake Geneva region had to pay 0.2 percent more in March, and even 0.9 percent in the greater Zurich region. According to a press release, rents in north-western Switzerland also rose by 0.3 percent, in eastern Switzerland by 0.2 percent and in Ticino by 1.9 percent. In Central Switzerland, on the other hand, rents fell by 1.2 percent. Over the year as a whole, rental prices rose by an average of 0.6 percent for the country.

    In the case of home ownership, prices have also developed differently, depending on the type of residence. While those interested in condominiums benefited from an average of 0.4 percent lower prices in March, buyers of single-family homes had to add 1 percent.

    In the past twelve months, home prices even rose by a record 7.2 percent. While the square meter cost 6398 francs in March 2020, it was 6857 francs in March of this year.

    In the case of condominiums, the plus of 3 percent was somewhat more moderate. Here, the price per square meter rose from 7,366 francs in March 2020 to 7,587 francs in March 2021.

    The data of the Swiss Real Estate Offer Index is created in real time on the basis of advertisements on the real estate platform ImmoScout24 and in cooperation with the real estate consultancy IAZI AG .