Rental housing reference rate stays unchanged

Malcolm Curtis
Malcolm Curtis - [email protected]
Rental housing reference rate stays unchanged

The rental housing reference rate — a key indicator in Switzerland for determining whether apartment rents rise or fall — remains unchanged for the next three months but it should drop in June, authorities said on Monday.


The Federal Housing Office (FHO) said the rate, set each quarter since September 2008, would stay at two percent.

The rate was determined according to the average interest rate on December 31st 2014 of 1.89 percent, slightly below the 1.92 percent level recorded three months earlier.

The FHO said the two percent reference rate would only change if rates went below or above the range of 1.88 to 2.12 percent.

However, both the housing office and the Swiss federation of landlords expect the reference rate will drop to 1.75 percent in June after mortgage rates hit historic lows in January.

If that happens tenants will have the right to request a reduction in rents.

The Swiss tenants’ association (SMV, known in French-speaking Switzerland as ASLOCA) emphasizes that rent reductions do not come automatically.

The association continues to maintain that rent rates have not matched the fall in mortgage rates over the past few years.

“Mortgage rates have practically been cut in half since 2008,” the group said, noting that rents have risen during this period.

SMV is asking the federal government to quickly examine a proposal from the Christian Democrat party that would automatically lower rents when the reference rate falls.

The organization is also seeking more transparency with regard to information about rents paid by previous tenants.

Expats arriving in Switzerland often face steeper rents than longtime residents who benefit from rent controls.

When an apartment changes hands, the property owner can boost the rent to whatever level the market will support.

As a result, in areas such as Geneva and Zurich where vacancy rates are low, newcomers can expect to pay well above the average for lodgings. 


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