by In a report published today entitled: rents losing altitude, UBS says asking rents for apartments will probably drop by up to 10% over the next three years. © Rosshelen | Dreamstime.com Competition in the rental market is getting even fiercer. By mid-2017, 2.4% of all rental apartments were vacant. This level was last exceeded in 1998, when 2.8% of rental apartments stood empty, says the bank. Higher rental vacancy rates, expected to hit an all time high of 3% in 2019, are driving down rents, according to UBS. Offered rents currently exceed existing rents by approximately 20%. When vacancies rise as sharply as they have today, to levels last seen in the early 1970s and 1990s, this difference typically gets eroded. “Without a clear change in construction activity trends or a new
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In a report published today entitled: rents losing altitude, UBS says asking rents for apartments will probably drop by up to 10% over the next three years.
© Rosshelen | Dreamstime.com
Competition in the rental market is getting even fiercer. By mid-2017, 2.4% of all rental apartments were vacant. This level was last exceeded in 1998, when 2.8% of rental apartments stood empty, says the bank.
Higher rental vacancy rates, expected to hit an all time high of 3% in 2019, are driving down rents, according to UBS. Offered rents currently exceed existing rents by approximately 20%. When vacancies rise as sharply as they have today, to levels last seen in the early 1970s and 1990s, this difference typically gets eroded.
“Without a clear change in construction activity trends or a new ‘immigration wave,’ asking rents will probably plunge up to 10% by 2020,” Claudio Saputelli, Head of Global Real Estate in UBS CIO WM, forecasts.
In Geneva, rents went up 5% annually between 2002 and 2015, double the rate in the rest of Switzerland. When vacancy rate go up in tight markets like this, rents tend to collapse quickly. For example, rents in the Lake Geneva region have shed 9% since 2015, even though the vacancy rate for rental apartments (0.8%) is only one-third of the Swiss average.
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UBS real estate report (in English)