immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Vermieter

  • Mortgage reference interest rate stable at 1.75 per cent

    Mortgage reference interest rate stable at 1.75 per cent

    The mortgage reference interest rate, which is decisive for setting rents throughout Switzerland, will remain at 1.75 per cent. This was announced on 3 June 2024 and is based on the volume-weighted average interest rate for domestic mortgage receivables, which stood at 1.72% on 31 March 2024. This average interest rate has not changed since the last quarter, meaning that the reference interest rate relevant under tenancy law remains at 1.75 per cent, rounded to the nearest thousandth of a percentage point. This stability will be maintained until there is a significant change in the average interest rate of below 1.63 per cent or above 1.87 per cent.

    Significance for rent claims
    The reference interest rate of 1.75 percent has remained unchanged since 2 December 2023. Tenancy agreements based on a higher reference interest rate of 2.00 per cent or more are still entitled to a rent reduction. Conversely, landlords are entitled to a rent increase if the underlying reference interest rate is 1.50 per cent or lower, in accordance with the provisions of tenancy law, which stipulate an increase of 3 per cent per quarter of a percentage point.

    Exceptions and additional influencing factors
    There are exceptions for certain rental agreements such as indexed or graduated rents and turnover rents for commercial premises. Subsidised flats are also often subject to special regulations. In addition, other cost factors such as the change in the national consumer price index and maintenance and operating costs can influence the rent structure. Inflation can account for 40 per cent of the rent calculation, which can lead to adjustments.

    Regular publication and legal basis
    The mortgage reference interest rate and the underlying average interest rate are published quarterly by the Federal Office for Housing (BWO), with the next publication on 2 September 2024. Since 10 September 2008, the uniform reference interest rate has served as the basis for setting rents in Switzerland, in accordance with Article 12a of the Ordinance on the Rent and Lease of Residential and Commercial Premises (VMWG). This regulation replaced the interest rates for variable mortgages previously applicable in the individual cantons and ensures a standardised and transparent rent calculation throughout the country.

  • Increase in vacancy rates on the Swiss office market

    Increase in vacancy rates on the Swiss office market

    The latest surveys by CBRE show that the available office space in Switzerland grew to 1.82 million square metres in the third quarter of 2023, which corresponds to 3.8 percent of the total stock. The peripheral office markets, which are located away from the five largest office locations – Zurich, Geneva, Basel, Bern and Lausanne – are particularly affected. There has been a significant increase in available space here, with the region around Zurich Airport and the Limmat Valley, for example, achieving an availability rate of 13.3 per cent.

    Meanwhile, demand for office space in central locations remains high. Tenants are increasingly focussing on aspects such as good accessibility, sustainability and high-quality fit-out by the landlord. The availability of office space in Zurich’s city centre fell to 2.7 percent in the same quarter, and even to 2.0 percent in Zurich’s CBD.

    The decline in overall demand is influenced by various factors. On the one hand, the increased supply of office space has outstripped construction activity and thus the completion of new projects. On the other hand, the cooling economic situation has led to a fall in demand. This trend has so far been masked by strong economic growth and high take-up of space, which has offset the increase in home office activity. However, the subdued demand is now making itself felt in the form of higher vacancy rates, which represents a challenge for property management.

  • 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.