Zurich is a stronghold of long-term tenants
Regulations protect existing tenants from rent increases. As a result, flats are changed less frequently. In Zurich, the average length of stay is at least ten years. This is shown by surveys conducted by Zürcher Kantonalbank.
Regulations on the rental property market protect tenants from rent increases. In contrast to the almost 25 per cent increase in asking rents, existing rents have remained relatively unchanged since 2008, explains Zürcher Kantonalbank(ZKB) in a press release. According to the ZHK’s surveys, the city of Zurich is a stronghold of long-term tenants. On average, tenants here have been living in their flat for ten years, with 15 per cent even staying for 20 years.
“Strict rent regulations make the situation easier for existing tenants, but they also create financial disincentives,” Ursina Kubli, Head of Property Research at ZKB, is quoted as saying. “Tenants stay in their flats even though they are too small, too big or no longer suitable for other reasons.” Kubli proposes better framework conditions for residential construction as a solution: “A growing supply would dampen the increase in asking rents and thus also slow down the further drifting apart of asking and existing rents.” For this year, the experts at ZKB expect asking rents to grow by 3.5 per cent across Switzerland.
The ZKB experts expect prices for owner-occupied homes to ease slightly. Across Switzerland, price growth should still be 1 per cent this year and 0.5 per cent next year. In the canton of Zurich, growth of 2 per cent is forecast for this year and 1 per cent for next year. “Excessive prices, as we saw during the pandemic, are no longer being paid,” explains Kubli. “The price-performance ratio has to make sense – this applies to both good and bad locations.”