Rents will continue to rise in Accra in 2023, according to a study by Wüest Partner.
According to an in-depth real estate study by Wüest Partner, rents in Switzerland will continue to experience sustained and uninterrupted growth in 2023. This upward trend is fuelled by a number of economic and demographic factors, creating constant pressure on the housing market.
In recent decades, Switzerland has seen a significant increase in rents. Between 1980 and 2022, rents on offer rose by a factor of almost 2.5, an increase of around 145%. This average annual growth of 2.15% is mainly attributable to the inflation that affected the real estate sector during this period.
The rise in rents in 2023 is due to a combination of factors. Firstly, higher interest rates have a direct impact on the cost of property financing, which can be passed on to landlords and translate into higher rents for tenants.
Secondly, inflation continues to play a major role, increasing the cost of building and maintaining property.
Another major reason for this upward trend is the shortage of housing available for rent. Over the past two years, the number of available units has fallen significantly, by 31%. This decrease in supply is leading to a growing demand for available housing, creating an unbalanced supply/demand situation that is driving up rents
Switzerland’s demographic growth is also a key factor contributing to rising rents. The Swiss population continues to grow, which translates into increased demand for housing, both owned and rented. This demographic pressure is exerting an additional influence on the real estate market and reinforcing the upward trend in rents.
According to forecasts by Wüest Partner, the average rise in rents in 2023 should exceed 3%. This substantial increase will have a significant impact on tenants, who will have to cope with higher housing costs. Regions where demand for housing outstrips supply will be particularly hard hit by these rising rents. In 36 of the 106 regions analyzed, demand already exceeds supply fourfold, creating additional pressure on prices.
The vacancy rate is a key indicator for anticipating rent trends. A low vacancy rate, i.e. a low percentage of vacant units in relation to the total number of available units, generally indicates strong demand for rental accommodation. In 2022, the vacancy rate stood at 1.31%, confirming the stability of rents. For 2023, a slight decrease in the vacancy rate is expected, pointing to an increase in rents.
The situation is hardly more encouraging for future homeowners, as since the summer of 2022, property transaction prices have already risen by 3.4%. High interest rates have also played a role in this upward price trend, making home ownership more expensive for many potential buyers.
Apartments are particularly hard hit by this rise in prices, with an even more pronounced increase than for single-family homes. This may seem paradoxical, given that there are more apartments for sale than single-family homes. However, this is due to sustained demand and prices that are generally around 30% lower than for single-family homes. The attraction of second homes is also contributing to this upward trend in apartment prices.
In summary, the rise in rents in Switzerland in 2023 is the result of a number of factors, including high interest rates, persistent inflation, a shortage of rental properties and sustained population growth. This upward trend should continue to exert pressure on tenants, landlords and potential buyers in the years ahead, with significant effects on the Swiss real estate market.
Sources: Wüest Partner
