Apartment rent decrease to due interest rate cut from the Swiss National Bank

Hello,
The Swiss national bank has just decreased the interest rate of 0.25%. Do you guys think that the rent prices are going to lower to? When do you expect we may ask the reduction?

Are you guys going to do it?
Last time it happened I personally requested it to my landlord and ended up in having a discount due to decrease of of interest rate, yet an increase of base value of the apartment. At the end of the day basically nothing changed, but then, when the interest rates increased again, I got a double increase, meaning that I basically got the increased interest rate applied on a increased base value. I did not do the whole mathematics, yet I have the feeling I finally lost some money in the whole process.

All suggestions are very welcomeâ€¦

You need the average mortgage to go down, itâ€™s not clear if/when it might happen (but wonâ€™t happen soon). (Iâ€™m not even sure all the increases made it to the mortgages to begin with, itâ€™s possible thereâ€™s still a lot of very low mortgages out there and average rate will still keep increasing as they get renewed)

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Indeed thatâ€™s the main thing as the averaging window spans over 10 years, anything renewed now gets a higher rate which in turn leads to an increase of the average rateâ€¦

Hi all,
Now that the cut happened last june, itâ€™s possible?

I remember my rental company increased my rent when the interest rate hiked to 1.5%.

Cannot we request the reduction now? If no, whatâ€™s the element that needs to change.
Thanks

The numbers on this site: Hypothekarischer Referenzzinssatz

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The SNB rate and the rental market rate are two different rates. The first one is realtime while the second one is based on the rates of the mortgages signed in CH over a 10 year sliding window. The rental market rate has a lot of inertia, it moves slowly.

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Once the â€śReferenzzinssatzâ€ť (not to be confused with the â€śSNB interest rateâ€ť) comes down, it makes sense to write the landlord immediately and ask for a reduction. Most of them are very quick in raising it, so you should do the same when it goes the other way.

Make sure that they donâ€™t increase the other things too much (usually Mietverband has a calculator tool for this to see whether it is in the legal range), then you will be fine. If youâ€™re still unsure, you could consider becoming a member of the Mietverband, then you can even directly ask them some legal questions.

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the rates of the mortgages signed in CH over a 10 year sliding window

Is it technically a 10y window? I thought it was simply all current mortgages, though of course a lot of them will be 10y fixed mortgages.

Yes it checks all the lending stock in CH. The sliding window is more of my own words to explain how it works in reality, as you have credits that mature and are replaced by new ones with a new rate with each reporting period.

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We just got a letter for a rent increase of nearly 15%, one of our friends and neighbour (who got the same rate increase) said they checked with the calculator and it appears itâ€™s within the legal range, but that thereâ€™s a gray area around nebenkosten. I need to look into it more carefully because the increase is not at all inconsiderable.

Iâ€™d imagine the estate company wouldnâ€™t have done something outside of the law, right? Itâ€™s just too much liability for them if itâ€™s something easily challenged - that friend happens to also be a Swiss lawyer, and extremely nitpicky about these things, so we trust that what she says stands.

If you are uncertain you can always go to the SchlichtungsbehĂ¶rde to try to fight it (itâ€™s free; as long as you donâ€™t count your time and nerves). I didnâ€™t do it when they increased it in our case, because it said its all within the limits. They increased it in 2 steps (Referenzzinssatz in the initial contract was 1.25%), always immediately after increased Referenzzinssatz was announced; total increase was 7% in the end.

But 15% seems high to me, in this case I would have probably gone to the SchlichtungsbehĂ¶rde.

Many companies do that regularly and then quickly reverse it for those tenants that complain, while keeping the extra cash from the majority of silent tenants. Unless you actually sue them (very rarely done), they real estate company doesnâ€™t have to fear fines etc. when doing these shady things, as long as they correct their â€śmistakeâ€ť when someone complains.

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Thanks - thereâ€™re two buildings in our complex, otherwise identical, but managed by two different companies. One of them (not the one I live in) had a similar rent increase ~6 months ago. I wonder if they fear much if many people leave, thereâ€™ve been many flat emptying from the other building, now in our neighborhood whatsapp group thereâ€™re already some who say theyâ€™ll look to move. Letâ€™s see, Iâ€™ll look into it in the evening.

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Challenge on the grounds of yield.

If youâ€™re lucky to be in an area where the market is tenant oriented (though Iâ€™m not sure where those are), definitely should consider voting with your feet

Otherwise best to at least try to enforce the regulation (ask MV for help if needed).

Are the nebenkosten a fixed fee included in the rent, or simply an advanced payment (more usual)?

If the former, you can challenge them and ask for a detailed description.
If the latter, then itâ€™s probably trickier to challenge, but you only end up paying what you actually use, and you can ask for the detailed bills. If last year you ended up owing quite a bit on the utilities, then a somewhat significant increase in the advanced payments can be reasonable.

Well thatâ€™s the thing, weâ€™ve asked for the detailed bill and nobody ever got it, over 2 years now, they claim they will do the sum when anyone decides to leave their flats. Of course what we think is that the nebenkosten are inflatedâ€¦

It sounds fishy. But for some stupid regulations, they can send you the final bill up to 5 years later.

Ah so theyâ€™re coveredâ€¦

15% looks very steep increase. Most likely you never got a rent increase when rates went up. But still the overall number looks high

Normally the landlord sends a justification

• inflation index
• reference rates information
• property had renovation to improve the value

I believe you need to review this increase separately for Base rent and utilities. The reason is that base rent can only be increased based on above factors.

But utility fees depends on the actual costs. And cost of energy depends on how efficient the buildings are as well as the technology they use. And of course how many people actually live in building also drive the cost

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Yeah Iâ€™ll see it, the thing is the letter they sent is registered, I need to pick it up. There wasnâ€™t a rent increase since we moved here 3 years ago, so maybe itâ€™s that.