It’s a well-known adage around the world that you shouldn’t spend more than a third of your salary on renting a house or apartment. But how true is that sentiment in Switzerland?
With rental costs rising at a rapid pace, many have questioned whether it is still reasonable to use just 33 percent of your earnings to rent a home in Switzerland. A study from Raifeissen back in September found that in the second quarter of 2024, the average rental cost for new apartments rose 6,4 percent compared to the same period the year before, the fastest rise seen since 1992.
“Asking rents are getting out of control,” the Swiss bank noted, adding that higher costs “will affect almost all tenants sooner or later.”
With this in mind, does the 33 percent rule still stack up?
Budgeting association Budget Conseil Suisse said that families and individuals should never spend more than a third of their net income on housing in Switzerland. "Ideally, we recommend even a quarter of net income," director Phillip Frei told Blick.
For families with two children with a combined income of 5.000 francs a month, no more than 1.650 francs a month should be spent on a home. For individuals with a net income of 4.500 francs or less, no more than 1.485 francs should be paid toward housing. In all, low-income households should pay as little as possible for their rental accommodation.
A spokesperson for the charity Caritas, Daria Jenni, told Blick that "the quota according to which rent should not account for more than a third of household income is in fact already too high for people on low incomes." She explained that low-income tenants “have to save the rising housing costs for other areas of life such as food, health or leisure," adding that the quality of life for these groups is declining because of the ever-harder financial balancing act.
While it is easy to advise families to save on their rental costs, the overheated nature of the Swiss housing market makes the prospect all the more challenging, especially in major cities. A study from the Lucerne University of Applied Sciences found that in 2021, 20 percent of low-income households in Switzerland spent half their disposable income on rent. This is compared to 17,2 percent of net income for higher earners.
In all, Budget Conseil Suisse noted that Switzerland is following the same track as other European nations when it comes to housing. For instance, due to high costs, more young people are expected to live with their parents for longer, or move into shared accommodation.
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