Inflation in Switzerland Senior citizens are now suddenly feeling the impact of inflation much more strongly

Inflation remains noticeable for Swiss households: according to the Comparis-Womo price index, the cost of housing and mobility rose by 1.7 percent last year - tenants are particularly affected.

Swiss households are still having to fight inflation and are feeling the effects. According to the Comparis-Womo price index, goods and services became 1.7% more expensive in November 2024 compared to the same month last year. The increase is particularly noticeable in rental costs, which have risen by 0.5% in the last three months alone. Over a period of five years, there has even been an increase of 9 percent.

The Comparis Homo Price Index, which has been published quarterly since March 2024 in collaboration with the KOF Swiss Economic Institute at ETH Zurich, shows how inflation has developed in the areas of housing and mobility (Womo).

According to the Womo price index, prices for housing and mobility in Switzerland rose by 1.7% in November 2024 compared to the same month last year. By comparison, the Swiss Consumer Price Index (CPI) published by the Federal Statistical Office (FSO), which covers a basket of over 1,000 goods and services, rose by just 0.7%*.

Compared to August 2024, prices in the Swiss Comparis Homo Price Index rose by 0.1% (CPI: minus 0.6%*). Apartment rents alone have risen by 0.5%* in the last 3 months. Compared to the same month last year, the increase is as much as 3.4 percent*.

Additional costs of 755 francs for a family

"For an average family in Switzerland, housing and mobility account for around 40 percent of the budget for daily consumption. That's why price increases here are particularly painful for consumers," says Comparis financial expert Dirk Renkert.

In the housing sector, the Womo price index records the price development of rents and energy as well as household goods such as furniture. In the mobility sector, it includes the prices for petrol or diesel, for cars or public transport tickets.

An increase in the Womo price index of 1.7 percent means that if a family spent CHF 2,500 a month on renting an apartment, CHF 1,000 on a car and CHF 200 on public transport tickets last year, the costs rose by around CHF 63 a month compared to the previous year. Over the year as a whole, this results in additional costs of 755 francs for housing and mobility alone.

Mortgage reference interest rate likely to fall again in 2025

Residential rents have risen by 9.3 percent* in the last 5 years. In a 2-year comparison, they have risen by 5.9 percent. This includes the rent increases for existing rents due to the increase in the mortgage reference interest rate. The mortgage reference interest rate is calculated from the average interest rate of outstanding domestic mortgage receivables from banks. Due to the sharp rise in mortgage interest rates, it increased in two steps from 1.25% to 1.75% in 2023. This was associated with rent increases by landlords.

Since the beginning of 2024, the conditions for mortgage loans have become significantly more favorable, as inflation has fallen sharply and the Swiss National Bank (SNB) has continuously lowered the key interest rate since March. With mortgage interest rates falling sharply, the mortgage reference rate is therefore likely to fall again soon.

Affected tenants will then be entitled to rent reductions. If the mortgage reference rate falls by 0.25 percentage points, this means a 2.9% reduction in rent. However, the landlord can offset 40 percent of the accumulated inflation and a flat rate of 0.5 percent per year as a general cost increase.

"The expected reduction in the reference interest rate should provide temporary relief for existing tenants. Conversely, new tenants are confronted with persistently rising asking rents due to a shortage of living space. Rising rents are and will remain a significant driver of inflation in the future," says Renkert.

Strongest price increase in the last 3 months

Since August 2024, prices for floor coverings and carpets have risen the most compared to November 2024, by 5.5%*. Bicycles and electric bicycles (up 5.3%*) and materials for home repairs (up 5.2%*) also became more expensive. Prices for living rooms and office furniture (up 2.4%*) and motorized tools for home and garden (up 1.6%*) also rose.

Strongest price decline in the last 3 months: In a 3-month comparison, the price of fuel fell the most. Prices fell by 5.8%* last month compared to August 2024. In the same period, other consumer goods for household use (down 2.5%*) and energy for heating (gas, heating oil, firewood and district heating) (down 1.9%) also became cheaper. Prices for new and used cars also fell by 1.1%* and 1.0%* respectively.

Highest inflation among single-person households aged 65 and over: Broken down by household type, single-person households aged 65 and over experienced the highest inflation in housing and mobility over the last 12 months. They are currently experiencing an inflation rate of 2.3% compared to the previous year. In November 2024, life also became even more expensive for them compared to August 2024, by 0.1%.

In purely mathematical terms, couples aged 65 and over without children feel the least in percentage terms. With an index level of 111.5, perceived inflation in the areas of housing and mobility has amounted to 1.4% in the last 12 months. In a 3-month comparison, inflation for them fell by 0.2% in November 2024.

Lowest income bracket feels inflation the most: The income classes show that life has become most expensive for the lowest income class compared to the previous year. The Womo price index has risen by 2.3% for this class. Compared to August 2024, inflation was unchanged.

The highest income bracket was the least affected by inflation. Compared to the previous year, prices for them rose by 1.5%. In the last three months, consumption for the highest income bracket has become 0.3% cheaper.

Highest inflation in French-speaking Switzerland: Broken down by language region, the following picture emerges: French-speaking Switzerland recorded the highest year-on-year inflation at plus 1.8%. Compared to August 2024, the price level fell by 0.1%.

The comparatively lowest year-on-year inflation was recorded in German-speaking and Romansh-speaking Switzerland, at plus 1.7%. Compared to 3 months ago, prices in the areas of housing and mobility were 0.1% lower.