SHARE
COPY LINK

COST OF LIVING

Switzerland ‘the most expensive in Europe’ for bread and meat

Few of us needed a reminder that Switzerland is a tad more expensive than its neighbours.

Switzerland ‘the most expensive in Europe’ for bread and meat
Photo by Henry and Co on Unsplash

But a new study from Eurostat shows that there’s nowhere on the continent where ein Stückchen Brot or une pièce de pain costs more than Switzerland.

In Switzerland, you’ll pay 1.64 times more for a piece of bread than the European average.

But if you’re planning to put a bit of meat on your bread, you’d better have deeper pockets – with meat costing 2.35 times as much as in Europe.

On the whole, an average grocery shop in Switzerland will set you back more than in Europe (1.66 times more expensive).

Milk, cheese and eggs – three Swiss staples – cost around 1.4 times more than they do in Europe.

READ: How Switzerland plans to beat its butter shortage (again) 

Alongside Switzerland at the top of the charts are some familiar non-EU members.

Norway and Iceland – alongside EU members Denmark and Luxembourg – round out the top five.

At the other end of the spectrum, Romania (0.53 times cheaper), Bulgaria (0.64), Poland (0.7) and Hungary (0.74) are the cheapest for food in Europe.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

COST OF LIVING

EXPLAINED: How inflation is increasing housing costs in Switzerland

Property is not exempt from inflation. Here's how costs are on the rise in Switzerland.

EXPLAINED: How inflation is increasing housing costs in Switzerland

First, the (somewhat) good news: The inflation rate in Switzerland —  2.6 percent  — is significantly lower than in neighbouring France (5.4 percent) and Germany (7.8 percent), as well as throughout much of Europe.

But even with the relatively low inflation, prices of many consumer products have been rising, with economists forecasting further hikes.

READ MORE: Seven products that are becoming more expensive in Switzerland

While you might notice the impacts of inflation when you buy groceries, consumer goods, food and petrol, inflation is also making a mark on the housing market.  

How is the housing market impacted by this phenomenon?

The impact on housing is indirect, which can be likened to the ‘domino effect’ — as the price of construction materials derived from petroleum, such as plastic, have risen, so has the cost of newly built houses and renovation work on existing properties.

Rents and mortgages are also impacted, although there the mechanism may be a bit complex to understand by non-experts. 

As Vincent Leroux, president of SVIT Romandie, the Lausanne-based section of the Swiss Association of Real Estate Economics, explained to Tribune de Genève (TDG), the “central bank have a particular mission to control inflation”.

To do this, it has the option of raising its key rate. When it does, the interest rates of financial institutions follow and rise in turn. The purpose of the maneuver is to reduce the use of credit, and to slow down the level of consumption and the upward trend in supply prices. But, if interest rates go up, rents can go up – as can the interest cost of a mortgage. 

EXPLAINED: How to save on your mortgage in Switzerland

This is the general picture, but what happens if you are a tenant?

All tenants are, or will soon have to, pay higher rents, according to Pierre Stastny, a lawyer at The Swiss Tenants Association (ASLOCA) in Geneva.

The determining factor is when the lease was signed and what the reference rate — weighted average interest rate for mortgages in Switzerland, announced by the Federal Housing Office each quarter — was at the time.

Those who rented their properties at a time when the reference interest rate was low could see their rents increase by 3 percent, Stasny said.

Those who contracted a lease whose rent is indexed to inflation will also see their costs rise.

This is because “the lease law authorises landlords to add 40 percent of the inflation rate to the rent”, Stasny pointed out. “But if the lease is signed for five years or more and the contract contains an indexation clause, the landlord can then pass on to the tenant the entire inflation rate.

How are homeowners affected by inflation?

According to Stéphan Mischler, director of mortgage and real estate platform MoneyPark, it depends on whether you are a first-time buyer, whose mortgage loan is in progress, or non-first-time buyers, who have settled their mortgage.

The former group is most at risk, money-wise.

“With inflation, the ten-year fixed interest rates, which are most often chosen in Switzerland, have started to increase: they have doubled and currently vary on average between 1.8% and 2.5%, compared to around 1% a few months ago”, Mischler told TDG.

“As a result, this doubles the interest cost of a mortgage for those who are currently looking to buy their home or for those who have recently taken out a mortgage.”

However, current owners could also be affected if they have to renew their mortgage in the near future.

Logically, this chain of events will also have repercussions  on potential buyers, as they may not be able to afford higher mortgage rates.

Other housing-related costs have risen in Switzerland as well. For instance, energy, including gas and electricity used by households, will  take a bigger chunk out of an average family’s monthly budget.

READ MORE:  How Covid, Ukraine and energy costs are changing Swiss spending habits

What exactly is inflation and what causes it?

Simply put, it is an increase in the prices of consumer goods and services, causing some loss of purchasing power. In other words, while our wages mostly remained the same, the cost of living went up, and is expected to continue to increase for at least the foreseeable future.

This trend started in mid-2021, as world economies recovered from the Covid pandemic, and Switzerland rebounded better than many other countries. However, with many supply chains still disrupted and struggling to meet consumer demand, prices began to rise.

The situation has worsened since Russia’s invasion of Ukraine on February 24th, which also slowed down or shut down altogether the production and supply of some essential agricultural and energy products, leading to higher prices.

SHOW COMMENTS