The Housing Market in Switzerland, a Quick Primer for Expats
Switzerland is a small mountainous country with only a small amount of land available for housing. Spaces are smaller than in many other countries.
Most people rent unfurnished accommodation. Less than 40% of the population owns homes, less than this in cities. When looking to rent, bear in mind that prices are high and the market is tight, particularly in urban areas.
Effective domicile (legal residency) is generally required to rent or purchase property in Switzerland. According to the Swiss Civil Code, ‘domicile' is defined as the place where a person lives with the intention to remain permanently, where their personal relationships are focused, where they regularly spend their non-working hours, where they foster family ties and friendships, and where they take part of social life in the community.
Tips on Finding the Right Housing in Switzerland
Be flexible regarding location when looking for a place to rent. Rental properties are scarce, so it's always better to keep your options open.
Rent first and purchase later once you're more familiar with the area. What looks good on paper may not live up to the hype later. For instance, you may consider renting something close to your work place, only to find out you have limited access to other areas of the city. Plus, no job is eternal.
Only consider purchasing property if you intend to stay in Switzerland for longer than six years. This will give you plenty of time to learn more about the rules and regulations, as well as about the areas worth investing in.
Key Points to Remember when Renting or Buying a Property
Realtors, estate agents
Estate agents and realtors control 95% or the rental market, and manage properties for owners. Owners may contribute to selecting the tenant, but otherwise there is no contact between tenants and owners.
Rental market vacancy rates and turnover
A balanced housing market generally has a vacancy rate between 1.5 and 3%, but most Swiss towns and cities have a vacancy rate of between 0.5% and 1.2%. Which means that the Swiss housing market is tight and demand is higher than supply.
This affects the price and the number of available properties. Because there are many international workers in big cities such as Geneva, Zurich and Basel, this causes a transient population, and apartments become available quite frequently. Thus, even if things may look grim when you first start looking for a place to live, chin up! The housing market may look better in a few days or months.
The best time to look for a rental property is between April and early July, as families relocate during the summer holidays. Tenants tend to stay in the same accommodation for much longer than average in other countries.
Although there are no bad neighbourhoods in Switzerland, certain areas are more desirable than others when considering factors such as taxes, access to schools and lake and mountain views. Property and rental prices reflect these differences.
Taxes vary according to the canton and community of residence, so where you live affects the taxes you pay. Even if you do not end up living in your first choice of location, because Switzerland is so small, you will never be far away. This is another argument for staying flexible on the area where you want to rent.
Types of permanent housing
You will probably have to get used to smaller spaces. It is not uncommon for a family of four to live in an apartment of 100 m2.
Houses with more than four bedrooms are unusual, but there may be a large basement which can be used as an extra room. Buildings are generally fairly modest but well maintained. Detached houses are mainly not in central areas, but on the outskirts.
In other words, you will have to choose between two types of comfort: living in a bigger place, with your own backyard or living closer to all the city facilities.
Is it better to buy or to rent?
Prices have increased significantly in the Swiss property market over the last ten years. Buying in Switzerland does become cheaper than renting over the medium term.
Have you already decided that you want to stay in Switzerland for more than 6 years? Then buying your own home might be a good choice. Before you jump into it, though, consider the following:
Property ownership is subject to taxation, so consult a tax advisor
A minimum 20% deposit is required when you apply for a mortgage loan. A mortgage broker can assist you in striking the perfect balance between deposit and monthly mortgage payments.
Again, you should stay in Switzerland for at least six years to make it worthwhile. Otherwise, the taxes you'll have to pay and the deposit will amount to more than the average rent for a similar property.
Tenants in Switzerland are protected by the law and given more rights compared to many other countries. Tenants associations like ASLOCA (Association de défense des locataires)/Mietverband offer legal advice to its members.
We advise you to look into these association and get their help, especially if it's your first time renting in Switzerland. They can make the whole process easier and their extensive knowledge of Swiss rental law will be of great help.
Introduction to the Swiss Mortgage System
If you're interested in buying property in Switzerland, find out more about the mortgage system in Switzerland in this comprehensive guide.
Do you need help finding your ideal home? Swiss housing market experts are just a click away.
Tell me more about Home-Finding support
Would you like to find out more about the complex Swiss housing market? What happens after you find a home in Switzerland? How to maintain your Swiss property and why this is so important? Have a look at Everything you need to know about the Swiss housing market.