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Old 13.04.2011, 23:36
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Changes in apartment market in mainland Zürich over the last years

It occurred to me that some of the other fellows here might have some insights about this.

Every year or so I read something about prices rising and demand not going down for housing in Zürich. But usually the figures are in the single digit percentages, 4% one year, 3% the next, I think my first year was the highest with 7% or so. Along with the supposed restrictions on changing prices following interest rate indices and the like, has anybody else noticed a much steeper tightening of the market?

I moved into Zürich just under three years ago, in the early summer of 2008. Back then it was very difficult to get an apartment, as I was new here (not familiar with the market, and less appealing to landlords), didn't have much time (with just a month of inconvenient temporary accomodation that I didn't want to extend), wanted to live in the mainland city (not the centre, but a walkable urban connected neighbourhood such as Wiedikon or Unterstrass, not the semidetached residential boonies like Leimbach or whatever).

I ended up with a contract offered for one of the apartments I applied for, quite habitable but not ideal, at a convenient location (Kreis 5, near Limmatplatz) and a rather fair price (relative to Zurich), and figured out it'll be a good place for a couple of years -- by which time if I'm still here I'll know the place better and be in a better position to look for and get a new apartment that suits me well.

Now every once in a while I have been habitually looking on Homegate and such for what's available even when plenty of things keep me too busy to think of actually dealing with a move. By now I feel I'm getting ready for it and in some months if I find something may actually free up the time to move. Having grown accustomed to my neighbourhood (which wasn't an expensive one at the time) I have some preference to staying in it, but I'm still looking at the whole mainland city. However getting an apartment does not seem any easier -- finding one seems to have become a lot more difficult...

There was and still is a lot of variance, and I don't have statistics or hard numbers, but a strong feeling that over the last three years, apartments in mainland Zurich have become both:
  1. A lot more expensive -- much more than the assumed 10% or so, more in the order of >50% -- what's with the story about regulated price increases?
  2. Much harder to find -- not even talking about actually getting a contract for one, the number of apartments advertised for rent at any time seems to be less than a quarter what it was before. The weird thing here is that the same ads are still going for a couple of weeks or more as they did before, so it's not the demand leaving them on the market for shorter, but rather the supply that seems to have gone down. Do less people move out nowadays? Or has some disorganized hand-to-hand market taken the place of regular ads on papers or Homegate and friends?

Some current observations are such crazy things as 2.5-room apartments in Kreis 4 going for 4,500 CHF, and just ten apartments in total (all sizes and price ranges) on Homegate in Kreis 5.

What's the deal? What's the trick for people who look for apartments in the city nowadays?

And are there anywhere more formal statistics of those things to compare my observations against?

Cheers
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Old 15.04.2011, 14:12
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Re: Changes in apartment market in mainland Zürich over the last years

I find these price statistics to be worthless. They vary so much depending on who is actually publishing them. Your informal observations probably reflect prices more acurately.
I don't see who can live in the city anymore except maybe rich bankers and ex-pats who get the rent paid by their company. Obviously, some "normal" people live in the the city, but they are either lucky or have the right friends.

The main problems with the housing market in switzerland are:
1. There are currently huge incentives not to move. Because of the way rents are calculated (i.e not based on inflation), there is a huge incentive to stay for a long time in your appartment. The longer you stay, the cheaper your appartment gets. Also, since it is so hard to find something, you're better off staying where you are (which is exactly what you are doing). All this makes the housing market very illiquid which is why the prices are so high.
2. People don't want to live far away from their jobs. In other countries, it's normal to commute 2hours (or more) a day. Not in switzerland. You basically have to live in the city you work in (or so the thinking goes). Funny thing is that in some regions, you can find apartments where they give you 1 or 2 month rent for free (and are actually not that far from big cities).

I would tell you that if you are not happy with where you live and find the prices of the city too high for you, you should just look further outside. But I know you will answer either in the typical swiss manner "what, and commute 1 hour a day? No way!" or in the typical expat manner "What, and live in a boring small town? Zurich is boring enough, thank you!"
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Old 15.04.2011, 14:30
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Re: Changes in apartment market in mainland Zürich over the last years

Also in bear in mnd that the more attractive appartments in terms of value for money don't get advertised on Homegate. The landlords don't need to as prospective tenants are queing to sign the contract anyway. Go to the home pages of renting companies and especially the Baugenossenschaften and sometimes it's worth picking up the phone or dropping in personally even if the website claims there are no appartments available.
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Old 15.04.2011, 14:41
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Re: Changes in apartment market in mainland Zürich over the last years

Thanks for your post. I've been in Zurich for 6 years and agree that housing has become more expensive and indeed even harder to find. Recently some friends moved out of thier 3 room 100sq apartment in Wipkingen. The landlord swiftly proceeded to bump the rent up from 2400 to 3600CHF. It was taken within a week.
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Old 16.04.2011, 01:06
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Re: Changes in apartment market in mainland Zürich over the last years

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Recently some friends moved out of thier 3 room 100sq apartment in Wipkingen. The landlord swiftly proceeded to bump the rent up from 2400 to 3600CHF. It was taken within a week.
That's what I mean. So what's all the talk of regulated price changes about?

Last edited by alsbergt; 16.04.2011 at 02:22.
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Old 16.04.2011, 13:45
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Re: Changes in apartment market in mainland Zürich over the last years

regulated price changes - urban myths I suspect.
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Old 16.04.2011, 13:59
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Re: Changes in apartment market in mainland Zürich over the last years

I may be wrong but I suspect that the price change regulations apply only to current tenants, i.e. when a landlord accepts a tenant he can't chuck them without good reason and he can't increase the rent year on year by more than x%. When a tenant leaves voluntarily (or is chucked for a valid reason), the landlord is free to charge a new tenant whatever the market will bear, but can't increase the initial amount charged to the new tenant by more than that set %age each year.
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Old 16.04.2011, 14:35
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Re: Changes in apartment market in mainland Zürich over the last years

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The main problems with the housing market in switzerland are:
I know well why the market in Zurich is so crazy and housing so expensive.
But all of that equally applied three years ago. I was just curious at what was driving the changes over the last years.

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1. There are currently huge incentives not to move. Because of the way rents are calculated (i.e not based on inflation),
Aren't they tied to the base interest rate? (which is low, but so is the inflation it is based on here...)

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2. People don't want to live far away from their jobs.
And now we slightly digress, but...

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In other countries, it's normal to commute 2hours (or more) a day.
In some places, for some definitions of normal...
Dead sleeping suburbs and long commutes are a disease of the 20th century following the advent of cheap motorized transport.

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Not in switzerland. You basically have to live in the city you work in (or so the thinking goes).
Don't know about have to, but it makes sense to, doesn't it?

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I would tell you that if you are not happy with where you live and find the prices of the city too high for you, you should just look further outside. But I know you will answer either in the typical swiss manner "what, and commute 1 hour a day? No way!" or in the typical expat manner "What, and live in a boring small town? Zurich is boring enough, thank you!"
Actually you wouldn't get either answer from me.

With transport working as well as it does here, commute doesn't really have to be bad -- I'd be as fast at work from Adliswil or Thalwil as from my place in the city for instance. That's not the point.

I also find neither Zurich nor much of Switzerland boring at all. For its size Zurich is quite lively, there other interesting towns spread across the country, and though I'm a rather urban person, the rural life in the countryside (with actual locally-based village communities) is not bad.

But walking out of your place and seeing nothing but rows of residential buildings road after road -- with almost no people on the street because once they leave their home it's to step on a train or into their car -- is just depressing. If your life is based in one place, your home should be there.

If I were to move out of Zurich while still working here I'd go for a somewhat longer commute from Winterthur -- a town I discovered has a fair concentration of life and culture of its own for its size -- rather than an immediate "ghost suburb" of Zurich.


Don't get me wrong -- I am not naively imagining that the city of Zurich can house all the million of people whose life is centred in it, at the prices of the periphery. It's sad that life here is so centralized, and I'd love to see more distribution of diverse neighbourhoods (where people would live, work, and hang out) spread around, but that's not going to happen. I was merely intrigued by the changes over such a short period of time (not just in prices but also in the number of places advertised), in light of the reported statistics and supposed regulation people speak of.
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Old 16.04.2011, 15:45
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Re: Changes in apartment market in mainland Zürich over the last years

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Aren't they tied to the base interest rate? (which is low, but so is the inflation it is based on here...)
Three years ago, the base rate was higher than it is now. Since the rent prices go down if the rate goes down, this means that rent prices have gone down for people who haven't moved in the last 3 years (theoretically anyway). Obviously, this doesn't apply if you move, because once there is a new tenant, the landlord resets the rent price to be in line with the market price (so in effect, the prices go up only if you move and go down if you stay put). This is an incentive not to move and has a big effect on liquidity (availability) and prices.
BTW, the base rate is in no way related to inflation.

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I know well why the market in Zurich is so crazy and housing so expensive.
But all of that equally applied three years ago. I was just curious at what was driving the changes over the last years.
Well if you did know, you would have the answer to your question. What I explained also explains why statics don't seem to reflect reality. When you are looking for a new flat, you pay more than what statistics suggest (+15% when statistics suggest only moderate increase). The statistics take into account the people who have been living in the same place for years and pay low rent (and as mentioned, rent prices have actually decreased for these people).

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And now we slightly digress, but...
Seems to be in line with the topic. This does explain why price hikes are amplified in swiss cities (in my opinion anyway and from what i've read) and thus helps explain the percieved changes you talk about.
I say "percieved" changes because to me the situation is "normal" (although not necessarily acceptable) i.e prices keep going up and availablity down. It's been that way in many parts of switzerland for decades.

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Actually you wouldn't get either answer from me.
I was making a generalization and the question was purely rhetorical... but it's nice to hear you are not like the average swiss and/or expat
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