Zurich Luxury-Home Renters Becoming Scarcer at $100,000 a Yearby
City of Zurich can't find renters for six-room appartments
Switzerland's biggest city has vacancy rate of 0.22 percent
Wanted: Tenants who can stomach paying 8,766 francs ($9,026) a month. On offer: A six-room apartment with a fireplace and veranda in the center of Zurich.
The city’s property management office has been trying to lease two luxury homes with that description for weeks -- despite the fact that Zurich has one of Europe’s tightest rental markets and apartments this size are rare in Switzerland’s biggest city.
“Finding someone to rent them is proving to be a bit of a challenge,” said Kuno Gurtner, head of communications at the real estate management office, which owns the properties near Zurich’s stock exchange. “In recent years we’ve always found tenants.”
Gurtner’s struggle coincides with a less welcoming environment to foreigners after Swiss voters last year backed a referendum to restore strict quotas for immigration from EU countries. A strong franc and corporate-tax reform additionally hamper Switzerland’s appeal. While Zurich’s apartment-vacancy rate was only 0.22 percent on June 1, the national figure of 1.19 percent was the highest in 14 years, according to the Federal Statistics Office.
“The rental sector is inevitably moving toward oversupply -- albeit in slow motion,” researchers at Credit Suisse Group AG said in a report on Tuesday, while property consultancy Wueest & Partner predicts prices will decline in expensive regions such as Lake Geneva and Zurich.
A number of factors may have made Zurich less attractive for immigrants, who typically are highly skilled and get lured by high salaries. A credit and risk manager in Switzerland earned between 7,700 francs and 10,100 francs a month in 2014, according to official data.
In addition to global banks Credit Suisse and UBS Group AG, the city is home to Google Inc’s largest engineering office in Europe, with employees from 75 countries. The 2014 vote to impose quotas on newcomers, combined with a 2013 referendum to limit corporate executive pay, are seen as deterrents, as is the overvalued currency and pending reform of corporate taxation.
Cultural factors may also play a role. While Switzerland scored first in the economics category of HSBC’s annual expat survey, it came in 26th -- behind countries including Spain, Bahrain and Malaysia -- in terms of experience, a measure that looked at lifestyle, ease of integrating with the local population and difficulty finding accommodation.
“In the mid-term, we expect a noticeable decrease in immigration,” Credit Suisse researchers said. “Vacancy rates are likely to continue to rise and will bring any upward pressure on rental rates to a complete standstill.”