Why some people are offering ‘bribes’ to rent a flat in Zurich
The housing shortage in Switzerland’s largest city is pushing some potential tenants to go to extreme lengths to secure an apartment. What are they doing and are these attempts successful?
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The housing vacancy rate in Zurich is a record-high (or low, in this case) at 0.07 percent, which reflects a severe shortage. This means that competition for each available apartment is fierce.
To increase their chances of being chosen from many candidates, some people have been offering 500 francs (and sometimes more) above the advertised rent to management companies representing the landlords.
According to a spokesperson for Privera property management company, interviewed by Nau.ch media outlet, this practice is “a regular occurrence,” especially in high-demand locations like Zurich, as well as in sublets.
Does this tactic work?
However, firms said this would not help prospective tenants secure a place.
“Our employees are strictly instructed to refuse such offers,” the spokesperson said.
Other renting companies have a system in place to prevent such abusive practices.
At Livit AG, for instance, the rental process is carried out digitally using an online form, the company’s spokesperson Barbara Buchegger pointed out.
This process “ensures maximum objectivity," in choosing tenants, she said. In addition, such bidders would be automatically excluded.
Fabian Gloor, from the Tenants Association of German-speaking Switzerland, said such moves to outdo the competition on the very tight housing market are "immoral and show lack of solidarity".
Also, unlike the sales of properties, where prices are negotiable, landlords cannot simply award the contract to the highest bidder, as the rent is determined by most current reference interest rates.
They play a role in determining rents in Switzerland, because when this rate is climbing, mortgages become more expensive for landlords, who then pass the additional cost on to their tenants.
Right now, the reference rate is 1.25 percent, and currently 54 percent of rental contracts in Switzerland are based on that rate.
Regionally, however, even a larger number of rentals are concerned: In the Zurich area, as well as in central Switzerland, for instance, more than 60 percent of rental contracts are based on a 1.25-percent reference rate.
By law, landlords can get returns of up to 2 percent higher than the reference interest rate.
So right now, landlords are entitled to returns of 3.25 percent; anything higher than that is considered ‘abusive’ toward tenants, and accepting higher rents than they are allowed would mean they are breaking the law.
READ MORE : How do you know if your Swiss rent is too high — and how can you challenge it?
Why are people in Zurich ready to pay over the asking price to snap up an apartment?
Finding affordable housing in Switzerland’s largest city is a major hassle, in large part due to an unprecedented influx of foreigners in 2022.
In all, 30,000 foreign nationals settled in Zurich last year, beating its 2007 record of 28,500 new arrivals from abroad.
The city is attractive for immigrants, as it offers many job opportunities and high salaries.
However, the area is running out of rental apartments — and this trend is likely to continue.
According to a forecast by the Zürcher Kantonalbank (ZKB), more people are likely to move to the city and canton this year as well — only to be faced with a shortage of dwellings.
READ MORE : Zurich hit by affordable housing shortage amid record-high immigration
Other reasons are exacerbating the housing crisis as well: about 25 percent less building permits have been issued in Zurich since 2018, while the demand has been growing steadily.
Consequently, the slow construction pace can’t keep up with the increasing number of people moving to the city.
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The housing vacancy rate in Zurich is a record-high (or low, in this case) at 0.07 percent, which reflects a severe shortage. This means that competition for each available apartment is fierce.
To increase their chances of being chosen from many candidates, some people have been offering 500 francs (and sometimes more) above the advertised rent to management companies representing the landlords.
According to a spokesperson for Privera property management company, interviewed by Nau.ch media outlet, this practice is “a regular occurrence,” especially in high-demand locations like Zurich, as well as in sublets.
Does this tactic work?
However, firms said this would not help prospective tenants secure a place.
“Our employees are strictly instructed to refuse such offers,” the spokesperson said.
Other renting companies have a system in place to prevent such abusive practices.
At Livit AG, for instance, the rental process is carried out digitally using an online form, the company’s spokesperson Barbara Buchegger pointed out.
This process “ensures maximum objectivity," in choosing tenants, she said. In addition, such bidders would be automatically excluded.
Fabian Gloor, from the Tenants Association of German-speaking Switzerland, said such moves to outdo the competition on the very tight housing market are "immoral and show lack of solidarity".
Also, unlike the sales of properties, where prices are negotiable, landlords cannot simply award the contract to the highest bidder, as the rent is determined by most current reference interest rates.
They play a role in determining rents in Switzerland, because when this rate is climbing, mortgages become more expensive for landlords, who then pass the additional cost on to their tenants.
Right now, the reference rate is 1.25 percent, and currently 54 percent of rental contracts in Switzerland are based on that rate.
Regionally, however, even a larger number of rentals are concerned: In the Zurich area, as well as in central Switzerland, for instance, more than 60 percent of rental contracts are based on a 1.25-percent reference rate.
By law, landlords can get returns of up to 2 percent higher than the reference interest rate.
So right now, landlords are entitled to returns of 3.25 percent; anything higher than that is considered ‘abusive’ toward tenants, and accepting higher rents than they are allowed would mean they are breaking the law.
READ MORE : How do you know if your Swiss rent is too high — and how can you challenge it?
Why are people in Zurich ready to pay over the asking price to snap up an apartment?
Finding affordable housing in Switzerland’s largest city is a major hassle, in large part due to an unprecedented influx of foreigners in 2022.
In all, 30,000 foreign nationals settled in Zurich last year, beating its 2007 record of 28,500 new arrivals from abroad.
The city is attractive for immigrants, as it offers many job opportunities and high salaries.
However, the area is running out of rental apartments — and this trend is likely to continue.
According to a forecast by the Zürcher Kantonalbank (ZKB), more people are likely to move to the city and canton this year as well — only to be faced with a shortage of dwellings.
READ MORE : Zurich hit by affordable housing shortage amid record-high immigration
Other reasons are exacerbating the housing crisis as well: about 25 percent less building permits have been issued in Zurich since 2018, while the demand has been growing steadily.
Consequently, the slow construction pace can’t keep up with the increasing number of people moving to the city.
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