A new report by the Zuricher Kantonalbank (ZKB) has predicted that the cost of renting a house or apartment in Switzerland will rise by up to 15 percent in the next five years. The Swiss bank explained that expected rises in interest rates will mean around 70 percent of residents will end up paying more by 2027.

Reference interest rate rises to hit Switzerland, says ZKB

In the report, given to Blick, ZKB predicted that the reference interest rate in Switzerland will double from 1,25 to 2,5 percent by 2027. A rise in the metric - which was originally designed to help residents apply for a rent reduction - would allow landlords to offset more of their rising mortgage costs by increasing rents. The bank predicted landlords would also raise rents further to help cover rising energy, gas and fuel costs.

ZKB warned that landlords are likely to raise rental costs in the near future, even for those who have already signed rental contracts. ZKB said the rises would have "a direct consequence on the wallets" of tenants, with rental costs rising by up to 15 percent in the next five years. 

70 percent of Swiss tenants to be hit by rising prices

By 2027, the bank estimated that 70 percent of tenants in Switzerland will have seen their rental costs rise. The increases are likely to be most pronounced in larger Swiss cities like Zurich, Geneva, Lausanne and Bern, where the housing shortage has already forced prices up faster than the rest of the country.