With rental costs continuing to rise across the country, a new report from Comparis has warned that more than a fifth of people in French-speaking Switzerland are breaking the “golden rule” of renting by spending more than a third of their income on their home.
"For many people in French-speaking Switzerland, housing represents a considerable financial burden,” the report from Comparis noted. While rental costs in the Romandie are more reasonable than in places like Canton Zurich and Zug, “relative to household incomes, housing costs remain too high for many.”
They found that around 22 percent of households spend more than 35 percent of their combined salary on rent. This is way above the “golden rule” of spending 33 percent of your income on housing or less, though some Swiss experts say that even this is too much for most.
Costs are most painful for those who earn the median salary in the Romandie (7.000 francs a month) or less, who make up 47 percent of those surveyed. In this group, nearly one in three households spend too much on rent, and 8 percent spend more than half of their income on their homes. “A situation that is untenable, to say the least," Comparis wrote.
The report added that by paying so much in rent, households in French-speaking Switzerland find it increasingly difficult to save money, plan for retirement and in some cases pay for taxes and health insurance. The number of people paying too much for housing is likely to rise in future as 33,5 percent of tenants in the survey have lived in their homes for more than 10 years, and are therefore sheltered from the high prices.
In the last few years, a combination of rising demand for homes, population growth, extremely slow rates of construction and the absence of effective rent controls has manifested itself in housing shortages and rising prices across Switzerland. However, there are signs of improvement on the horizon: for example, housing construction is on the rise for the first time in seven years.
In addition, a recent UBS study predicted that rental costs will stagnate in 2025. This is because, while asking rents will likely continue to rise, average existing rents will fall due to the cut to the reference interest rate in March, which allowed a majority of tenants to ask for a rent reduction.