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Swiss rents set to fall for first time in decade

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Swiss rents set to fall for first time in decade
Weakening demand and rising supply will push down rents, Zurich-based property analysts Wüest and Partner predict. Photo: AFP
13:00 CET+01:00
The drop won't be huge but average rents in Switzerland are set to come down next year for the first time in ten years, real estate specialists Wüest and Partner are saying.

Swiss rents are to come down by an average of 0.3 percent in 2016 on the back of weakening demand and rising supply, the property firm predicts in the autumn edition of its Immo-Monitoring report.

Wüest and Partner predict that while rents on single-family homes will edge up 0.4 percent next year, that rise will be offset by an average 0.6 percent fall for apartment rentals — the first such decline in this sector of the rental market in 15 years.  

And while that might not be enough to get the champagne corks popping for renters, the forecast is a respite after an 0.5 percent rise in rents in 2015, according to the Zurich-based firm.

People in western Switzerland should enjoy the greatest benefits with Wüest and Partner predicting rents in the region to drop 0.8 percent, while the area around Lake Geneva – where the rental market is particularly ruthless – should see a fall of 0.6 percent on average.

In the canton of Valais, rents will come down an average 2.1 percent, according to forecasts.  

By contrast, rental costs on other side of the Röstigraben are set to rise slightly, with the increase predicted to be 0.3 percent in the greater Zurich region and 0.4 percent in the city of Zurich itself.

Meanwhile, in Italian-speaking Ticino, rents are heading for an 0.8 percent uptick.

Switzerland's housing market has been in hyperdrive in recent years driven by increasing demand and sexy low-interest rates.

But foreigners have been scared off by a stronger Swiss franc and supply is now catching up with demand, according to Wüest and Partner.

The Swiss government announced in September that the number of vacant apartments in the country shot up a full 12 percent in the year to June 1st 2015, hitting a total of 51,172, or the highest in 15 years.

That means the vacancy rate is now 1.19 percent.

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