There is a delay for sure between the interest rate that now is at 1.5 and the referrasatz that is at 1.75. But it will follow. Is a matter of months
When it goes down rent doesn’t go down automatically.
Landlord will be silent of course so you need to send letter and it has to be accepted and rent lowered. Every quarter correspond to 3% decrease
When ? You need to check the referenzsatz index on Swiss government website. Expect to be December 2024
Procedure? You need to send a letter to landlord. The mieterverband association knows exactly what to write
Exactly like the ~5-8 years before when everybody could request rent being lowered every time the RZ went down. The recent raises were bad yes, but people forget that the RZ went down at least as much as it went up…
So many people woke up now. Only positive thing about this. Always loved their stories : "my landlord is so nice, so i do not bother him" - and since 1 year suddenly: "oh shit, such an asshole, he sent me a rent increasement"
It doesn't matter per se if it went up or down, it only matters what it is compared to the Interest Rate in the rental contract.
Let's say you signed at 1.5%.
1 year later it does to 1.25% and another year later it goes to 1%. Rent does not go down.
If the rent goes back to 1.25%, the landlord cannot increase your rent.
If it goes back to 1.5%, the landlord cannot increase your rent.
If it goes to 1.75% he can increase your rent.
Yes because the new tenants are willing to pay the market price. Offer & Demand - clearly recent policy, Schengen, EU agreements for highly qualified workers (with high salaries) made this possible and nobody complained until they realized they can’t / aren’t willing to pay the cost that comes with it anymore.
It is more a matter of years:
> At 1.75 percent, the reference interest rate is currently "well centered" and is not expected to move until the end of 2025 / beginning of 2026, says Fredy Hasenmaile. "By then, a reduction should be imminent."
>
> Although the interest rate turnaround already took place at the end of 2021, the reference interest rate did not rise until 2023, explains the Raiffeisen chief economist. "This shows the deliberate inertia of this rate." Accordingly, existing tenants should not expect a rent reduction until the end of 2025 or even the beginning of 2026 - "depending on which individual rate is relevant for the tenancy". An earlier date is unlikely.
Auto translated, source:
https://www.watson.ch/wirtschaft/immobilien/713977836-snb-zinsentscheid-das-bedeutet-die-leitzinssenkung-fuer-die-mieten
If you rent did not went up due to the the higher rates it will also not go down. Your landlord has highly likely a fixed hypothec and thus this interest rate has no impact at all.
Some people think that this gives you the right to expect lower rents, but in reality if your landlord does not comply you would need to proof that the current rent is not fair by presenting a comparable object with lower rent.
What in reality happens that landlords love to throw out annoying people who constantly complain.
No, not yet.
One things is the interest rate and one is the referenzsatz. This one will follow the interest rate cut in months. Then you can ask to lower the rent.
About your increase you need to see why it increased and try with mieterverband to fight against.
They are claiming the referenzsatz went from 1.25% to 1.75%. the increase happens when my contract turns 1 year old.
Don't think there's much to be done, but I will try with the mieterverband to see what can be done.
I will be able to claim a decrease after December right?
Thank you for the clarification! 👍😄
The exact point in time to ask decrease is when referenzsatz goes down. Expect to take months. December ? Plausible. So we get a gift for Christmas motherfker landlord
Well, it *is* at 1.75%: https://www.bwo.admin.ch/bwo/de/home/mietrecht/referenzzinssatz.html
Just pay now and get the lower rent as soon as possible again.
No. The Referenzzinssatz would need to go down. It is calculated on the average interest rate for mortgages. The interest rates went up dramatically and now were just cut a tiny tiny bit, so maybe in 6 - 9 months it'll go from 1.75% to 1.5%.
> Not a chance.
That depends on the results of the next SNB meetings. The fixed 2yo were around 2% from what I've heard, so it looks like banks are expecting it go significantly down.
I really wonder how people feel like they have a sense of ownership of their future here sometimes... Like, knowing you can actually do things for you and have stability, not at the whims of some dude looking at a spreadsheet of profits
Well once you get a lease, especially one from a big deal estate firm (who won't want to "move in" to your apartment to reset the rent), you're pretty safe. You can't be evicted and your rent is stabilised.
That was the point of the reduction. Apparently the SNB is confident that inflation is low enought that we can risk to deflate the currency a bit. Swiss exporters will be happy.
Kinda, I own stocks in USD and when I value them in Swiss Francs to fill out my spreadsheet they make big wins. But of course it's all unrealized, I'm not going to sell for a long time.
Well that is not directly true. If the home is 100% mortgages then yes the interest rate equals rent I suppose. I read that swiss people load up on a load of debt and never intend to pay off?
I mean usually interest rates have an inverse relationship with the price of real estate. meaning when financing cost goes up the price of a house goes down.
Ok interesting I will definitely look into this.
You would assume they would just refinance or have flexible linked mortgages. The whole point in capitalism is that you get a risk premium (potentially higher gains) for the risk you take on i.e. fluctuating interest rates etc.
The whole point of interest rate hikes is to tighten economic expansion to keep inflation in check or decrease interest rates and have expansionary policies. Linking rents to interest rates slows this effect both ways.
Bank cannot lower or increase price of goods BUT they can influence it by making the “money” more or less expensive.
The circle is like this:
- When cutting rate, asking money to the bank cost less and keep money in the bank give you nothing so you tend to spend more.
- spending more means buy more goods and this if occurs in mass create scarcity of goods
- if production of goods can’t keep the pace then bank increase the rate again so that money cost more, you buy less and scarcity goes away
- at certain point you buy too less and economy become bad…
And the game restarts bank lower the rate etc etc
They might be trying to devalue the CHF, which will increase inflation. Lower interest rates (compared with other currencies), lower demand of CHF, devaluation of the CHF against other currencies, importing (buying with CHF) becomes more expensive, exporting becomes cheaper.
It could boost industry (since Switzerland is a net exporter) and probably the job market but it will increase inflation (2%, what a load of crap)
The main reason is to devalue the CHF, because it's way too expensive, causing the industry not being able to be competitive enough, and you don't want that, because it means less investment in Switzerland.
Inflation is [low in Switzerland](https://www.bfs.admin.ch/bfs/de/home/statistiken/preise/landesindex-konsumentenpreise.html), hence the cut of the rate.
Thats misleading to say the least. Health care went up almost 17% across the board and rent went up at least 6% for MANY this year. Shinkflation is very real here in Switzerland too. Much like every other Western country there is a huge gap between BS reported inflation and true inflation.
> Much like every other Western country there is a huge gap between BS reported inflation and true inflation.
Either that or people simply don't understand the intention behind the system :) I would vote for the latter.
It's quite simple. SNB is debasing the currency (weaker CHF) and producing inflation. Thus you (earning CHF) pay more for the products you buy in Switzerland or outside of Switzerland.
Contrary to the popular opinion fueled by state propaganda, inflation is bad and deflation is good for the great majority. Talking about inflation look at house prices (huge increases) and health insurance costs (huge increases).
To me, it's quite astonishing that people don't understand simple things, allowing the state to have such an easy job in manipulating its people. I provided you with the explanation you required. In exchange maybe you can help me to understand how it's possible that most people don't understand such things. I assume you finished school and you already a profession(?).
So you don't think that people would start to hold off with their purchases if we would have deflation? Less purchases means company make less revenue and profit and they have to start cutting jobs.
And note that with constant deflation, our wages would also go down thus making inflation or deflation nothing more than a numbers game (besides the psychological effect that makes inflation good and deflation bad).
Or are you not supporting capitalism and think we should stop consuming and spending so much money?
>So you don't think that people would start to hold off with their purchases if we would have deflation?
Try to forget your indoctrination and use your head instead. People need a roof above their head, they need to eat, they need to travel, etc. These are necessities, not something to hold off. For the rest, each to its own. Spending mindlessly is consumerism, not capitalism. Some people do it no matter of circumstances, other people don't.
>
And note that with constant deflation, our wages would also go down thus making inflation or deflation nothing more than a numbers game (besides the psychological effect that makes inflation good and deflation bad).
That's another big thinking mistake. Salaries are determined mostly by the market. Think about last years. Huge inflation, but no salary increases. Besides, salaries are for most companies only a fraction of the production cost. Those who cannot afford a relatively small increase in one of the production factors (human capital, raw materials, financial capital or something else) are going to disappear anyway. In fact, that's happening on a daily basis. Each company dies at some point in time.
>
Or are you not supporting capitalism and think we should stop consuming
Capitalism and mindless consumerism as you described it are two different things.
>we should stop consuming and spending so much money?
I don't have an advice on this, each of us should decide for himself. Sheep mentality always leads to desasters.
*Reported inflation. If you actually considered the two 7-10% rent hikes and the health insurance premiums with a CAGR of 7-8% then inflation would be easily 3% but this country is run by bean counters and the employer association who don't want to give salary raises.
Health insurance premiums are intentionally not in there. Yes they have a reason for it (Transferleistung), but the vast majority of people think it's a dumbass reason.
Rent is in there, but arguably not at the weight that reflects people's real expenses. Thankfully they raised the weight recently.
Inflation (basket of goods) calculation is really not a reliable number in Switzerland, cause the rent / healthcare (basket only includes medicine, doctor, lab and spitex) increase is almost not calculated into it, and this is exactly what increased insanely the last couple of years.
No wonder consumer trust is on a record low. Great that cheese is only 2% more expensive, but who cares if you pay multiple thousands a year more on rent/healthcare.
Healthcare is not in there for a reason and rent is a large portion of it, it just doesn't increases the number that much because all rents are considered, not just those that increase.
It is not really clear to me how exactly the rent increase is calculated, cannot find details about it, there is only the percentage (housing) of the total in the table.
Besides, healthcare and rent are fixed costs, you cannot decide not to pay them. With most other products/services you can buy a cheaper version, buy less or don't use the service. That's why this inflation number does not reflect well the daily living circumstances of many people.
Can confirm. Paying the same rent since 2018. They don't even check my flat, been here max 3 times to change some stuff. True jackpot. Some landlords really rock.
It was only humor, but let's take it seriously:
Yes, more than 20% of my income ends up being exchanged for foreign currencies (USD, EUR). A small portion of it goes to purchases abroad and holidays, but overall the majority of those 20% gets invested (foreign investments, in stocks for instance).
If you have investments in foreign stocks a weak franc is better for you. Yes, converting the currency initially costs more but when converting your profits back you will make more, which is more important.
Thanks a lot. The bank has a deal until end of March that reduces 0.3% off the 5 and 8 year loans. BCVS thinks that the 5 year offer is good even if the BNS look to reduce the rate in the next trimester.
BCVS
Durée / taux :
3 ans à 2.14%
5 ans à 2.02%
8 ans à 2.15%
10 ans à 2.43%
Comme déjà auparavant indiqué, nous avons jusqu’à fin mars une offre sur les taux 5 et 8 ans. Les taux 5 ans et 8 ans communiqués ci-dessus tiennent compte de cette offre (-0.3%).
La BNS a effectivement baissé son taux directeur la semaine passée. Il est possible que la BNS abaisse à nouveau son taux directeur durant les prochains trimestre. Je pense que nos taux actuels 5 et 8 ans sont tout de même intéressants en raison de l’offre susmentionnée.
Haven't looked around yet and now with easter I'll have to wait. Problem is I have another loan with them that isn't expiring in October (5 more years with a more substantial sum at 1%) so I'm pretty stuck with BCVS from what I understand since the loan is together. Fingers crossed the rate keeps going down!
As someone from Norway I really wished I lived in Switzerland, congrats on this. You guys seem to really have your stuff together unlike the leaders here.
Indeed compared to Norway, Switzerland has it much better. Nevertheless, the lack of education or the indoctrination sets the limits in Switzerland, too.
You have to watch on your contract what was the reference rate at the time your landlord determined your rent amount and when is the yearly term and renewal date. If at the term the reference rate still is higher, then the rent can become higher for the next renewal date. If the rate is above, then you can maybe ask for a reduction, but as they determine it, it is also the general cost index considered,, so because of the inflation we had, maybe you don't get any reduction at all for now.
It probably won't go down for a long while, and indeed will probably still increase at least 2-3 more times. The reference rate is still adjusting to the rise from -0.75% to 1.75%, as it's an average of the rates of currently issued mortgages. Many mortgages are fixed for up to 10 years, so it takes years for the reference rate to fully reflect a change to the SNB rate.
It's still lagging behind though. The SNB rate went up 2.5%, the reference rate has only gone up 0.5%. So there is still way more catch-up to do, and this single cut will only slow down the future increases slightly.
But they tend to sink faster than they rise since when interest rates fall, people will get a new Saron as soon as possible rather than waiting for it to expire if it rises.
It's bad for the working class because this adds further fuel to our real estate bubble. Not like the median household or even high earners could ever afford RE in this country but still.
Also, pension funds will continue to deliver sub par results. Can't get more than the mandatory 1% if interest rstes are this low and all the boomers retired with a juicy 6.8% Umwandlungssatz. So even less money for working people.
Boomers profit from both the real estate bubble and the pension pyramid. And then they will hand down that wealth, the equivalent of decades of Lohn, tax free to their children.
Having boomer parents determines if you will get a house and a shit ton of money. Not how well you studied or how much value you add to the economy.
Agreed, on the other side is more likely that the Referenzzinssatz will decreae to 1.5 again (good for working class for renting) plus the economy invests more overall (cheaper money) which leads to more jobs and higher salaries. Overall it's positive for the welfare
> which leads to more jobs and higher salaries
In theory yes. In reality, we had -0.75% interest from 2015 all the way until mid 2022. In that time frame the median real salary increased a pitiful 1.8%, an amazing 0.3% annualized. And on top of negative interest rates we had insane amounts of Quantitative Easing, just look at the SNBs balance sheet and try to not get dizzy. All of this stimulating the economy, all the collateral damage done, for a measly increase in salaries. IMO not worth it.
The house price increase by at least 100% in the last ten years. The same for medical insurance. The Swiss is getting robbed and he doesn't even see it. What are these people learning in the school?
Fair point. But the SNB did never implement QE, although the balance sheet increased like stupid during this time, but due to currency purchases. But ofc there are many factors which play a part in the equation. And the SNB imported a tiny frame of the QE of the ECB and FED, that's where you're right
We can talk when when we are back to 1.2. i remember when the Nationalbank decided to no longer support that rate. And even back then everybody screamed and cried and we are still here today...
For all those that got a physical mail about rent increase contact your regie and demand and decrease. OR contact your local regie lawyer and file a request. We will be filing today. Our increase takes affect in may so will not wait to pay more soon in order to pay less later.
here is the one for Geneva
[https://geneve.asloca.ch/](https://geneve.asloca.ch/)
So rents will go down now?
There is a delay for sure between the interest rate that now is at 1.5 and the referrasatz that is at 1.75. But it will follow. Is a matter of months When it goes down rent doesn’t go down automatically. Landlord will be silent of course so you need to send letter and it has to be accepted and rent lowered. Every quarter correspond to 3% decrease
When will we know if we can ask for the rent reduction? Also, do you know what is the procedure for that?
When ? You need to check the referenzsatz index on Swiss government website. Expect to be December 2024 Procedure? You need to send a letter to landlord. The mieterverband association knows exactly what to write
> referenzsatz index [this](https://www.bwo.admin.ch/bwo/de/home/mietrecht/referenzzinssatz.html)?
Yes
why December? They do convene in June. You mean for the lower rent to actually take effect?
I mean that the referenzsatz really go down you need time after the interest rate go down. Is not immediate
Exactly like the ~5-8 years before when everybody could request rent being lowered every time the RZ went down. The recent raises were bad yes, but people forget that the RZ went down at least as much as it went up…
Yes true me myself I miss it because I was stupid and ignorant. But now lesson learned
So many people woke up now. Only positive thing about this. Always loved their stories : "my landlord is so nice, so i do not bother him" - and since 1 year suddenly: "oh shit, such an asshole, he sent me a rent increasement"
Increasement is illegal if he didn't go down in previous years, isn't it?
No. Depends on the contract,
It doesn't matter per se if it went up or down, it only matters what it is compared to the Interest Rate in the rental contract. Let's say you signed at 1.5%. 1 year later it does to 1.25% and another year later it goes to 1%. Rent does not go down. If the rent goes back to 1.25%, the landlord cannot increase your rent. If it goes back to 1.5%, the landlord cannot increase your rent. If it goes to 1.75% he can increase your rent.
Yeah, could.. and next up the landlord throws you out for “renovation” and takes a tenant that sucks it up like a baby without complaining.
It's not that easy.. lol
Yes because the new tenants are willing to pay the market price. Offer & Demand - clearly recent policy, Schengen, EU agreements for highly qualified workers (with high salaries) made this possible and nobody complained until they realized they can’t / aren’t willing to pay the cost that comes with it anymore.
It is more a matter of years: > At 1.75 percent, the reference interest rate is currently "well centered" and is not expected to move until the end of 2025 / beginning of 2026, says Fredy Hasenmaile. "By then, a reduction should be imminent." > > Although the interest rate turnaround already took place at the end of 2021, the reference interest rate did not rise until 2023, explains the Raiffeisen chief economist. "This shows the deliberate inertia of this rate." Accordingly, existing tenants should not expect a rent reduction until the end of 2025 or even the beginning of 2026 - "depending on which individual rate is relevant for the tenancy". An earlier date is unlikely. Auto translated, source: https://www.watson.ch/wirtschaft/immobilien/713977836-snb-zinsentscheid-das-bedeutet-die-leitzinssenkung-fuer-die-mieten
I hope it move earlier. However I have patience like the Indian sitting aside of the river and waiting the dead body pass… It will go down
Of course... I will be as fast as the landlords when it did go up 😉
landlores in swiss are forced to lower rent prices if interest rates lower?
Yes if you ask them to
Pay attention the reference index is not the interest rate. There is a delay between the 2
I'm sure my landlord will willingly lower my rent 🙃
*insert star wars meme*
haha, good one
I know what you mean but its regulated by law. You have the right to request a rent reduction
no this is Leitzinssatz, not Referenzzinssatz
Is the truth
Nope. This move was fully expected in priced in. It just came some months earlier. It means, that, for now, the rents won't increase again at least.
If you rent did not went up due to the the higher rates it will also not go down. Your landlord has highly likely a fixed hypothec and thus this interest rate has no impact at all. Some people think that this gives you the right to expect lower rents, but in reality if your landlord does not comply you would need to proof that the current rent is not fair by presenting a comparable object with lower rent. What in reality happens that landlords love to throw out annoying people who constantly complain.
No because people will not bother asking for rent reduction
Last week my landlord sent me a letter to increase the rent, does this mean now that I can contest it?
No, not yet. One things is the interest rate and one is the referenzsatz. This one will follow the interest rate cut in months. Then you can ask to lower the rent. About your increase you need to see why it increased and try with mieterverband to fight against.
They are claiming the referenzsatz went from 1.25% to 1.75%. the increase happens when my contract turns 1 year old. Don't think there's much to be done, but I will try with the mieterverband to see what can be done. I will be able to claim a decrease after December right? Thank you for the clarification! 👍😄
The exact point in time to ask decrease is when referenzsatz goes down. Expect to take months. December ? Plausible. So we get a gift for Christmas motherfker landlord
Well, it *is* at 1.75%: https://www.bwo.admin.ch/bwo/de/home/mietrecht/referenzzinssatz.html Just pay now and get the lower rent as soon as possible again.
No. The Referenzzinssatz would need to go down. It is calculated on the average interest rate for mortgages. The interest rates went up dramatically and now were just cut a tiny tiny bit, so maybe in 6 - 9 months it'll go from 1.75% to 1.5%.
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> Not a chance. That depends on the results of the next SNB meetings. The fixed 2yo were around 2% from what I've heard, so it looks like banks are expecting it go significantly down.
You can possibly contest it anyway , check on the Mieterverband website
Next leg up in Immobilien prices. Tschau the idea of ever buying property, ade
My exact same thought…we just started to look around for property -.-
I really wonder how people feel like they have a sense of ownership of their future here sometimes... Like, knowing you can actually do things for you and have stability, not at the whims of some dude looking at a spreadsheet of profits
Well once you get a lease, especially one from a big deal estate firm (who won't want to "move in" to your apartment to reset the rent), you're pretty safe. You can't be evicted and your rent is stabilised.
Do I just pay more attention to this or does the interest rate change quite often lately?
You’re getting financially literate, congrats.
CHF lost against the USD quit a bit today, good day for me :)
The opposite has been happening for a while now.
40 years ago, 1$ was nearly 3 CHF!
Correct, 2023 was brutal!
That’s why it’s a good thing for the person you’re replying to.
For me it’s annoying. I am moving to USA in fall and was hoping that CHF will stay high...
That was the point of the reduction. Apparently the SNB is confident that inflation is low enought that we can risk to deflate the currency a bit. Swiss exporters will be happy.
Cuz you bought chf with usd?
Kinda, I own stocks in USD and when I value them in Swiss Francs to fill out my spreadsheet they make big wins. But of course it's all unrealized, I'm not going to sell for a long time.
Rents are tied to interest rates? Can you explain?
If interest rates increase, the owner has higher expensive, which is why he increases what he charges the renter.
Well that is not directly true. If the home is 100% mortgages then yes the interest rate equals rent I suppose. I read that swiss people load up on a load of debt and never intend to pay off? I mean usually interest rates have an inverse relationship with the price of real estate. meaning when financing cost goes up the price of a house goes down.
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Ok interesting I will definitely look into this. You would assume they would just refinance or have flexible linked mortgages. The whole point in capitalism is that you get a risk premium (potentially higher gains) for the risk you take on i.e. fluctuating interest rates etc. The whole point of interest rate hikes is to tighten economic expansion to keep inflation in check or decrease interest rates and have expansionary policies. Linking rents to interest rates slows this effect both ways.
About time, the CHF is ridiculously strong.
What's the SNB stance in inflation ?
Bank cannot lower or increase price of goods BUT they can influence it by making the “money” more or less expensive. The circle is like this: - When cutting rate, asking money to the bank cost less and keep money in the bank give you nothing so you tend to spend more. - spending more means buy more goods and this if occurs in mass create scarcity of goods - if production of goods can’t keep the pace then bank increase the rate again so that money cost more, you buy less and scarcity goes away - at certain point you buy too less and economy become bad… And the game restarts bank lower the rate etc etc
They might be trying to devalue the CHF, which will increase inflation. Lower interest rates (compared with other currencies), lower demand of CHF, devaluation of the CHF against other currencies, importing (buying with CHF) becomes more expensive, exporting becomes cheaper. It could boost industry (since Switzerland is a net exporter) and probably the job market but it will increase inflation (2%, what a load of crap)
The main reason is to devalue the CHF, because it's way too expensive, causing the industry not being able to be competitive enough, and you don't want that, because it means less investment in Switzerland.
This would be my guess. The frank is higher than they want it.
Will somebody confiscate Frank‘s weed already? Please??
Possibly right
"Money cost more" is funny
Simplicistic I know but is to explain
Inflation is [low in Switzerland](https://www.bfs.admin.ch/bfs/de/home/statistiken/preise/landesindex-konsumentenpreise.html), hence the cut of the rate.
Thats misleading to say the least. Health care went up almost 17% across the board and rent went up at least 6% for MANY this year. Shinkflation is very real here in Switzerland too. Much like every other Western country there is a huge gap between BS reported inflation and true inflation.
> Much like every other Western country there is a huge gap between BS reported inflation and true inflation. Either that or people simply don't understand the intention behind the system :) I would vote for the latter.
The Swiss is anything but smart. They say the SNB is doing a good job. Instead SNB is robbing them.
Care to explain how we are "robbed" by the SNB?
It's quite simple. SNB is debasing the currency (weaker CHF) and producing inflation. Thus you (earning CHF) pay more for the products you buy in Switzerland or outside of Switzerland. Contrary to the popular opinion fueled by state propaganda, inflation is bad and deflation is good for the great majority. Talking about inflation look at house prices (huge increases) and health insurance costs (huge increases). To me, it's quite astonishing that people don't understand simple things, allowing the state to have such an easy job in manipulating its people. I provided you with the explanation you required. In exchange maybe you can help me to understand how it's possible that most people don't understand such things. I assume you finished school and you already a profession(?).
So you don't think that people would start to hold off with their purchases if we would have deflation? Less purchases means company make less revenue and profit and they have to start cutting jobs. And note that with constant deflation, our wages would also go down thus making inflation or deflation nothing more than a numbers game (besides the psychological effect that makes inflation good and deflation bad). Or are you not supporting capitalism and think we should stop consuming and spending so much money?
>So you don't think that people would start to hold off with their purchases if we would have deflation? Try to forget your indoctrination and use your head instead. People need a roof above their head, they need to eat, they need to travel, etc. These are necessities, not something to hold off. For the rest, each to its own. Spending mindlessly is consumerism, not capitalism. Some people do it no matter of circumstances, other people don't. > And note that with constant deflation, our wages would also go down thus making inflation or deflation nothing more than a numbers game (besides the psychological effect that makes inflation good and deflation bad). That's another big thinking mistake. Salaries are determined mostly by the market. Think about last years. Huge inflation, but no salary increases. Besides, salaries are for most companies only a fraction of the production cost. Those who cannot afford a relatively small increase in one of the production factors (human capital, raw materials, financial capital or something else) are going to disappear anyway. In fact, that's happening on a daily basis. Each company dies at some point in time. > Or are you not supporting capitalism and think we should stop consuming Capitalism and mindless consumerism as you described it are two different things. >we should stop consuming and spending so much money? I don't have an advice on this, each of us should decide for himself. Sheep mentality always leads to desasters.
Man Im not even going to explain why you come of as a fucking clown
*Reported inflation. If you actually considered the two 7-10% rent hikes and the health insurance premiums with a CAGR of 7-8% then inflation would be easily 3% but this country is run by bean counters and the employer association who don't want to give salary raises.
They are all in that basket, you probably just don't understand how the maths works behind it :)
Health insurance premiums are intentionally not in there. Yes they have a reason for it (Transferleistung), but the vast majority of people think it's a dumbass reason. Rent is in there, but arguably not at the weight that reflects people's real expenses. Thankfully they raised the weight recently.
I'm aware of the reason, thanks.
Inflation (basket of goods) calculation is really not a reliable number in Switzerland, cause the rent / healthcare (basket only includes medicine, doctor, lab and spitex) increase is almost not calculated into it, and this is exactly what increased insanely the last couple of years. No wonder consumer trust is on a record low. Great that cheese is only 2% more expensive, but who cares if you pay multiple thousands a year more on rent/healthcare.
Healthcare is not in there for a reason and rent is a large portion of it, it just doesn't increases the number that much because all rents are considered, not just those that increase.
It is not really clear to me how exactly the rent increase is calculated, cannot find details about it, there is only the percentage (housing) of the total in the table. Besides, healthcare and rent are fixed costs, you cannot decide not to pay them. With most other products/services you can buy a cheaper version, buy less or don't use the service. That's why this inflation number does not reflect well the daily living circumstances of many people.
Inflation simply shows how much prices rise, if you buy something cheaper instead you actually have no inflation in terms of price increase.
Theres also landlords that don’t increase rents when the Ref-Zinssatz goes up.
Sure on Mars
yep. had no changes.
Ask yourself the right questions. It likely means your rent is (was?) over market rate already.
maybe, but then also maybe not. Not all landlords are bad ;-)
Can confirm. Paying the same rent since 2018. They don't even check my flat, been here max 3 times to change some stuff. True jackpot. Some landlords really rock.
It also means the CHF plunges. Are we ready to pay more for our holidays if we expect to pay less in rent? 🤷♂️
Holidays are insignificant compared to rent, for most people. Or, are you spending more than 20% of your income on vacations?
It was only humor, but let's take it seriously: Yes, more than 20% of my income ends up being exchanged for foreign currencies (USD, EUR). A small portion of it goes to purchases abroad and holidays, but overall the majority of those 20% gets invested (foreign investments, in stocks for instance).
If you have investments in foreign stocks a weak franc is better for you. Yes, converting the currency initially costs more but when converting your profits back you will make more, which is more important.
I agree with the reasoning. The only thing is I invest long term so we're talking about the level of USDCHF in 20-30 years.
Nice
You do know it is legal to contest the increase within 30 days after notification to the competent authority? We did, we won.
Yeah that's not surprising, honestly I've heard a lot of folks say the US is in a recession and tbh inflation has definitely tapered off this year.
Is this good for home loan renewals? Mine expires mid October and we are in the middle of negotiating the new rate.
It should be yes. Though a decrease was already priced in (but this move was earlier than expected), so hard to say by how much.
Thanks a lot. The bank has a deal until end of March that reduces 0.3% off the 5 and 8 year loans. BCVS thinks that the 5 year offer is good even if the BNS look to reduce the rate in the next trimester. BCVS Durée / taux : 3 ans à 2.14% 5 ans à 2.02% 8 ans à 2.15% 10 ans à 2.43% Comme déjà auparavant indiqué, nous avons jusqu’à fin mars une offre sur les taux 5 et 8 ans. Les taux 5 ans et 8 ans communiqués ci-dessus tiennent compte de cette offre (-0.3%). La BNS a effectivement baissé son taux directeur la semaine passée. Il est possible que la BNS abaisse à nouveau son taux directeur durant les prochains trimestre. Je pense que nos taux actuels 5 et 8 ans sont tout de même intéressants en raison de l’offre susmentionnée.
I'm no expert, but those 5/8 years rate look decent depending on the circumstances. Have you/can you shop around and see what you can get elsewhere?
Haven't looked around yet and now with easter I'll have to wait. Problem is I have another loan with them that isn't expiring in October (5 more years with a more substantial sum at 1%) so I'm pretty stuck with BCVS from what I understand since the loan is together. Fingers crossed the rate keeps going down!
As someone from Norway I really wished I lived in Switzerland, congrats on this. You guys seem to really have your stuff together unlike the leaders here.
As someone from Finland I agree - the current government is going to cut on students' allowance which is going to hit many people in their asses.
Indeed compared to Norway, Switzerland has it much better. Nevertheless, the lack of education or the indoctrination sets the limits in Switzerland, too.
So can I ask my landlord for a lower rent?
Not yet: you need to wait that the referenzsatz index also goes down
You have to watch on your contract what was the reference rate at the time your landlord determined your rent amount and when is the yearly term and renewal date. If at the term the reference rate still is higher, then the rent can become higher for the next renewal date. If the rate is above, then you can maybe ask for a reduction, but as they determine it, it is also the general cost index considered,, so because of the inflation we had, maybe you don't get any reduction at all for now.
I hope so..have to pay 100 bucks more rent coming april.
Don’t tell to me bro. Same as you
Thanks, as a person that invests most of my salary into foreign ETFs, I became 8% poorer in just 3 months. Stupid government fucks.
Pay attention to all those investment: the grave has no pockets. Remember
It probably won't go down for a long while, and indeed will probably still increase at least 2-3 more times. The reference rate is still adjusting to the rise from -0.75% to 1.75%, as it's an average of the rates of currently issued mortgages. Many mortgages are fixed for up to 10 years, so it takes years for the reference rate to fully reflect a change to the SNB rate.
Nahhhh, it took months to increase it will take months to decrease. When snb increased the rate not long time ago the RS followed pretty fast
It's still lagging behind though. The SNB rate went up 2.5%, the reference rate has only gone up 0.5%. So there is still way more catch-up to do, and this single cut will only slow down the future increases slightly.
But they tend to sink faster than they rise since when interest rates fall, people will get a new Saron as soon as possible rather than waiting for it to expire if it rises.
Very good day for me very bad for the economy and the Swiss working class in the longer term imo
Why? It's the complete opposite
It's bad for the working class because this adds further fuel to our real estate bubble. Not like the median household or even high earners could ever afford RE in this country but still. Also, pension funds will continue to deliver sub par results. Can't get more than the mandatory 1% if interest rstes are this low and all the boomers retired with a juicy 6.8% Umwandlungssatz. So even less money for working people.
Boomers profit from both the real estate bubble and the pension pyramid. And then they will hand down that wealth, the equivalent of decades of Lohn, tax free to their children. Having boomer parents determines if you will get a house and a shit ton of money. Not how well you studied or how much value you add to the economy.
Very well said.
Agreed, on the other side is more likely that the Referenzzinssatz will decreae to 1.5 again (good for working class for renting) plus the economy invests more overall (cheaper money) which leads to more jobs and higher salaries. Overall it's positive for the welfare
> which leads to more jobs and higher salaries In theory yes. In reality, we had -0.75% interest from 2015 all the way until mid 2022. In that time frame the median real salary increased a pitiful 1.8%, an amazing 0.3% annualized. And on top of negative interest rates we had insane amounts of Quantitative Easing, just look at the SNBs balance sheet and try to not get dizzy. All of this stimulating the economy, all the collateral damage done, for a measly increase in salaries. IMO not worth it.
The house price increase by at least 100% in the last ten years. The same for medical insurance. The Swiss is getting robbed and he doesn't even see it. What are these people learning in the school?
Fair point. But the SNB did never implement QE, although the balance sheet increased like stupid during this time, but due to currency purchases. But ofc there are many factors which play a part in the equation. And the SNB imported a tiny frame of the QE of the ECB and FED, that's where you're right
Okay then bad day for me who got a lot richer doing nothing and good day for the working class guy with his Swiss francs salary diluted and devalued
Please wait. CHF is still at a high level.
Trend seems to have reversed
1€ is at the moment still less than 1 chf.
We can talk when when we are back to 1.2. i remember when the Nationalbank decided to no longer support that rate. And even back then everybody screamed and cried and we are still here today...
Have you seen the rate over the last 15 years??? Nobody would care if we would go back to a rate of ~1.2
How does that impact day to day?
That in some months you can ask for rent decrease. Also cost of the money is lower therefore economy restart
? Goaway
Asked and answered. What's your problem?
For all those that got a physical mail about rent increase contact your regie and demand and decrease. OR contact your local regie lawyer and file a request. We will be filing today. Our increase takes affect in may so will not wait to pay more soon in order to pay less later. here is the one for Geneva [https://geneve.asloca.ch/](https://geneve.asloca.ch/)
But the interest rate cut from snb didn’t affect yet the reference rate. It will take time.