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Renting now ‘cheaper than buying’ in Switzerland

Rising interest rates fuelled by economic uncertainty has meant renting a home is cheaper than buying in Switzerland for the first time in 15 years, a new study has found, although there is a pretty important catch.

Close up pictures of colourful doors. A new study shows renting can be cheaper than buying in Switzerland. Photo by Christian Stahl on Unsplash
Close up pictures of colourful doors. A new study shows renting can be cheaper than buying in Switzerland. Photo by Christian Stahl on Unsplash

High property prices and the need for a 20 percent deposit can make the costs of buying a house in Switzerland prohibitive, leading many to choose renting as a cheaper option. 

However, economic uncertainty – such as the fallout from Russia’s Ukraine invasion and the lingering impacts of the Covid pandemic – can put upward pressure on interest rates. 

A Credit Suisse study from 2022 found that for the first time in 13 years, renting was actually a cheaper option than buying in the longer term, due mainly to a rise in interest rates. 

According to the researchers “the first time in a long time, buyers or owners of a condominium have to pay more than for a comparable rental apartment”. 

EXPLAINED: How to save on your mortgage in Switzerland

The researchers compared advertised property prices and rents, comparing rental expenses with the costs of a five-year fixed mortgage on a 4.5-room apartment. 

Renting was a cheaper option than buying due to a 45 percent increase in mortgage interest since the beginning of 2021. 

On a one-to-one comparison, the study found that paying a mortgage on a 4.5-room apartment would cost you CHF23,128 per year, compared to CHF22,440 per year to rent. 

Of course, in the longer term those who buy a house will own some or the whole home as opposed to those who rent. 

EXPLAINED: Why not paying off your mortgage in Switzerland can save you money

Economic uncertainty fuels change in Switzerland

This represents a change in Switzerland, where low interest rates had made purchasing a property actually cheaper over the long term. 

A report from 2020 found that buying a house in Switzerland can save you a considerable amount of cash over time – particularly for families. 

The report, prepared by Switzerland’s Raiffeisen Bank, showed that despite rising house prices – it was still considerably cheaper to buy in the long term when living in Switzerland. 

Average rental payments for a 3 to 4.5-room apartment in Switzerland – when compared to mortgage repayment costs – are 20 percent higher than buying a house of the same size on average. 

More information about renting and buying property in Switzerland can be found at the following link. 

Buying property versus renting in Switzerland: What is actually cheaper?

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For members


How a cross-border train has pushed house prices up in Switzerland and France

A commuter rail link between Switzerland and France has caused property prices on both sides of the border to rise sharply.

How a cross-border train has pushed house prices up in Switzerland and France

When the Léman Express (LEX) was inaugurated in December 2019, its main goal was to connect the Geneva region with neighbouring French towns and provide a quicker commute for cross-border workers.

Established by the Swiss (SBB) and French (SNCF) railway companies, LEX is Europe’s largest cross-border regional rail network.

Some of the approximately 92,000 employees from France commute to their jobs in the Lake Geneva region by car, while others prefer to take Léman Express, which was launched specifically to reduce journey times and cut traffic in and around Geneva.

But while this goal has been largely achieved – the train carries 52,000 passengers a day — the rail link is also causing rents and property prices in the vicinity of the train’s 45 stations to soar by 8 to 9 percent on average — a sharper increase than elsewhere in the region.  

Prices rose in the French departments of Haute-Savoie and Ain, as well as in Swiss cantons of Geneva and Vaud, all of which lie along Léman Express’ 230-km track, according to Tribune de Genève (TDG).

Screenshot Léman Express

Why has this happened ?

As a general rule, transport infrastructure influences real estate prices, according to Dragana Djurdjevic, statistician at Wüest Partner real estate consultants interviewed by TDG.

Increases vary based on the type of transport —such as trains, buses or trams — as well as the frequency and the distance of the property to the nearest stop.

Typically, prices / rents are the highest within 300 metres around a station.

In general, Swiss and French municipalities with a LEX station have recorded significantly higher rents and sale prices than areas that have no access to the train, Djurdjevic said.

Just how much have prices increased along the LEX line?

On  the Swiss side, rents rose by 4.9 percent along the track.  In Geneva itself (already the most expensive rental market) , they went up by 1.5 percent, and only slightly less (1.4 percent) in Vaud.

READ MORE: Why is Geneva’s rent the highest in Switzerland?

In terms of properties, prices along the network rose by 17.7 percent; in Geneva the increase is 12.3 percent, and 13 percent in Vaud.

In neighbouring France, rents increased by 6.1 percent along LEX stops. In Haute-Savoie, the increase is 6.3 percent and in Ain 9.1 percent.

Sale prices went up by 15.7 percent along the track, 14.8 percent in Haute-Savoie and 23.7 percent in Ain.