Swiss rents set to rise as much as 15 percent

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Close to half of renters is Switzerland could face significant increases in rent, estimates Zürich Kantonalbank (ZKB), with rents potentially rising as much as 15% over the next five years, reported the newspaper Blick.

The reference mortgage rate used to set rents, which was has been 1.25% since March 2020 could rise as high as 2.5% between now and 2027, said the bank in a recently published real estate report.

This means that any leases with a clause linking rents to the reference mortgage rate could rise. These contracts grant landlords the right to raise rents when the rate rises. At the same time renters can demand rent reductions when the rate falls.

In addition, low and declining home vacancy rates in Switzerland are giving landlords the upper hand when it comes to deciding lease terms.

In Switzerland, a high as nearly 70% of renters could be affected by the rise in the mortgage reference rate, according to ZKB.

On top of rising rents, landlords are allowed to pass on 40% of the impact of inflation on costs, which include items such as service charges for shared areas in apartments.

More on this:
Blick article (in French) – Take a 5 minute French test now

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