Predicted 15% Increase in Rents by 2026: How the Interest Rate Hike Could Impact Housing Market

2023-09-02 04:19:48

According to the director of the Federal Housing Office Martin Tschirren, rents could rise by more than 15% by 2026. A third increase in the reference interest rate is possible in the next one to two years, has he warned Saturday in the Blick.

With an increase of 25 basis points, landlords can claim a rent increase of 3%. But for Martin Tschirren, “40% of the increase in prices since the last adjustment of the rent can still be added to it”. The next hike in the benchmark mortgage rate should take place in December or March, according to its estimates.

The OFL announced on Friday that it was maintaining this rate at 1.5% for the time being. Introduced in 2008, it fell steadily before reaching a historic low of 1.25% in recent years. A first increase took place last June, with the rate rising to 1.5%. According to several analysts, it could be increased to 1.75%, then 2% in the course of 2024.

Decline in construction

Added to the rise in the interest rate is the decline in construction despite high demand and the rise in the prices of energy and building materials, underlines Martin Tschirren.

The Federal Council organized a round table last May to deal with the housing shortage. The first draft of an action plan is being finalized, according to the OFL director, who calls on politicians to show “courage”.

>> Read also: The rise in rents by institutional landlords denounced by Asloca in Geneva

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