immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Teuerung

  • Affordability of housing in Switzerland

    Affordability of housing in Switzerland

    The affordability of housing is currently at the centre of political and public attention. According to the Federal Statistical Office, prices for the “Housing and energy” category of the national consumer price index rose by an annual average of 9.3 per cent between 2020 and 2023, well above the general inflation rate of 5.6 per cent. This development has intensified political calls for more affordable housing and greater support for tenant households.

    Stable trend in affordability
    The analysis of the affordability of housing costs – i.e. the ratio of housing costs to gross income – shows a stable trend over the last 20 years. Despite rising rents and property prices in real terms, the average burden ratio for Switzerland as a whole has remained constant at around 20 per cent of gross income, well below the limit of 30 per cent that is considered affordable. However, a breakdown of the burden ratio according to various household characteristics indicates a certain deterioration in affordability for mobile households – i.e. households that have recently moved into a flat. Single-person households and households in densely populated regions, which often have a high level of housing consumption, are subject to an above-average burden.

    Costs of subsidised housing already exceed those of subsidised housing
    Subsidised housing is used more frequently than subsidised housing at all levels of government. The estimated direct costs of object support currently amount to around CHF 88 million. In addition, there are indirect costs such as lost interest, rental and building lease income, which are estimated at CHF 560 to 830 million per year. Subject assistance, which mainly takes the form of social welfare and supplementary benefits, already costs CHF 1.7 billion a year. Despite higher overall costs, subject assistance does not prove to be significantly more expensive per supported household compared to object assistance.

    Advantages of subject assistance as a housing policy instrument
    Comprehensive subject assistance could improve the accuracy of Swiss housing policy. The study shows that the “supplementary benefits” model would require state support of around CHF 1.45 billion, with 12.6 per cent of Swiss households being eligible. A model like the one in Basel-Stadt, which only supports households with children, would cost just under CHF 700 million and cover 3.6 per cent of households. These costs would be only slightly higher than those of the current property subsidy.

    Cost-benefit ratio crucial
    The study suggests that the introduction of nationwide subject aid could substantially improve the targeting of housing policy. Although subject aid may be more expensive, it has a better cost-benefit ratio. The possibility of tailoring subsidies to target groups, situations and needs makes subject aid an efficient and effective housing policy instrument. The financial outlay depends heavily on the practical organisation of the system, and fears of possible price pressure on the housing market are only justified under certain conditions.

  • 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.

  • Home prices rise by 1.2% in Q2 2023

    Home prices rise by 1.2% in Q2 2023

    In Q2 2023, both the prices of single-family houses (+0.7%) and those of owner-occupied flats (+1.6%) rose across Switzerland compared with the previous quarter. In the case of single-family houses, prices rose the most in the urban municipalities of a small conurbation or outside a conurbation (+3.4%), while prices in the urban municipalities of a large conurbation and in the intermediate municipalities remained stable. The condominium market segment shows higher prices than in Q1 2023 in all municipality types. The strongest price increase took place in the category of urban municipalities of an intermediate agglomeration (+2.4%). Further information at www.bfs.admin.ch/bfs/de/home/aktuell