Do short-term tenants promote a housing shortage?
A furnished apartment with pool and room service: Serviced Apartments are booming in Switzerland. This increases price pressure and housing shortages.
In Switzerland, the business with serviced apartments is growing. These are furnished rental apartments, with certain services such as laundry included in the rent. The term is broad, however.
Basically, serviced apartments are according to the real estate monitoring of Wüest Partner in terms of service and equipment level between hotels and furnished living. Typically, the apartment cleaning is included. In addition, the infrastructure on site often belongs to the offer. Guests can use the gym or the complex belonging to the residential complex.
47 percent surcharge
Serviced apartments are lucrative as they often lead to above-average returns, according to Wüest partners. They are noticeably more expensive than classic rental apartments. At a high service level landlords demand on average 47 percent more rent compared to a regular apartment, the authors said.The surcharge of furnished rental apartments without additional services is on average just under 7 percent. According to the study, a serviced apartment costs around 2,500 Swiss francs per month in Swiss terms.
Most users of such offers are foreign business people. Accordingly, serviced apartments are mainly found in major Swiss cities, especially in Zurich. The apartments are also characterized by «excellent location quality», according to the study authors. For example, traffic connections are extremely good.
However, these apartments are not aimed at long-term tenants: the majority stays for a maximum of two months. Thus, the rental period for such an offer is massively shorter than for classic rental apartments. There, according to Wüest, it is the average partner for around 7.5 years.
National Councilor Balthasar Glättli sees a connection between serviced apartments and housing shortages: “If regular living spaces are converted into serviced apartments, of course, living space disappears for the quite normal long-term tenants.” In this case, there are fewer apartments for people who want to permanently move to Zurich, for example, can not afford an expensive serviced apartment.
Apartment buildings become serviced apartments
In fact, many of the newer serviced apartments were originally conventional apartment blocks, as the study says. “The fact that classic residential properties are converted into serviced apartments can often be seen in the city of Zurich,” says Walter Angst of the Tenants’ Association Zurich for 20 minutes. “When a family is thrown out of the apartment and then a kind of pension comes in, the emotions boil up.”
This type of dwelling exerts considerable pressure on the availability and prices of housing in inner city neighborhoods. “It would be smart to do something right now, because the problem will tend to get bigger,” says Angst. The municipalities should be able to regulate the number of centrally located apartments with spatial planning measures. However, fear does not expect that this will soon be the case in the Canton of Zurich.
10’000 Serviced Apartments
Wüest Partner is already assigning at least 10’000 residential units in Switzerland to the segment and writes that serviced apartments should continue to gain in importance in the future. Visionapartments, for example, the provider that according to Wüest partners in Switzerland leads the most serviced apartments, announced on 26 October that the company opened a six-storey new building in Lausanne that doubles its range of serviced apartments in the city in one fell swoop.
Photos of selected Le Bijou apartments: