Swiss rents flat in July, but Lugano posts a 6.3% annual rise

Rents for new or re-let apartments held steady in Switzerland in July. Compared with June the figure is unchanged, while the annual increase remains 2.4 per cent. The numbers come from the index compiled by the property portal Homegate and the Zurich Cantonal Bank.

The monthly stability conceals marked regional differences. Fifteen of the twenty-five cantons recorded a decline against June, with Nidwalden down 4 per cent and Schwyz down 1.9 per cent. Ticino, by contrast, is among the cantons rising, up 0.6 per cent on the month, the same as St Gallen and the highest in the survey.

The Lugano case

On an annual basis every canton is up. Graubünden leads with 7.1 per cent, followed by Zug at 5 per cent and Lucerne at 4.2 per cent. Ticino stands at 2.5 per cent, slightly above the national average.

The figure that matters most for Italian-speaking Switzerland, however, emerges from the comparison of the eight major cities analysed. Lugano shows the sharpest increase both on the month, at 1.9 per cent, and on the year, at 6.3 per cent. That is well above Lucerne at 3.8 per cent, Basel at 3.7, Lausanne, Zurich and Geneva all at 2.4, Bern at 1.5 and St Gallen at 0.9.

The gap between Lugano's 6.3 per cent and Ticino's overall 2.5 per cent indicates that pressure is concentrated on the urban centre rather than the rest of the canton.

The index measures asking rents for homes coming onto the market, not rents under existing contracts. It therefore captures the cost for people looking for a home now: those moving, those separating and those entering the rental market for the first time.

The figures arrive as the question of rents has returned to the centre of federal debate. The popular initiative against abusive rents, promoted by the Swiss Tenants' Association, formally succeeded with more than 108,000 valid signatures and will now go through Parliament before reaching a vote.