04 November 2026 — Ramzi Chamat
Editorial update :
Statistical reference rent: what Swiss lease reform could cost landlords
Switzerland’s Federal Council is preparing an indirect counter-proposal to the rent initiative. According to an analysis by UBS’s Chief Investment Office published on 30 October 2026, the option under study would replace today’s calculation with a statistical reference rent and index existing leases to 80 or 90% of inflation. For owners of income properties, the impact shows directly in the rent roll.
The starting point is the Federal Housing Office (FHO) report of 25 September 2026. It is not yet a bill: consultation is expected in the first half of 2027 and the dispatch to Parliament by the end of 2027.
Today’s system in brief
- At signing, the absolute method applies: gross and net yield, plus local comparable rents. In practice, new lettings enjoy wide contractual freedom.
- During the lease, the relative method applies: rents follow the mortgage reference rate, 40% of inflation, cost increases and added services.
What the option under study would change
Item | Current law | FHO option |
|---|---|---|
Initial rent | Absolute method | Statistical reference rent (hedonic model) |
Link to reference rate | Yes | Removed |
Inflation pass-through | 40% | 80 or 90% of CPI |
Landlord alternative | – | Skip indexation and align with the reference every four years |
Change of owner | – | Early adjustment possible |
Value-adding works | Passed on | Still passed on |
The weakness flagged by UBS
The model would rely mostly on existing lease rents, so it would reflect supply and demand with a lag. In tight markets such as Geneva, UBS expects a growing gap between permitted and market rents.
UBS ten-year projections
In UBS’s base case (SNB policy rate gradually raised to 1% by summer 2028), existing rents would rise on average each year until 2036 by:
Regime | Average annual increase |
|---|---|
Current law | 1.8% |
80% CPI indexation | about 0.8% |
Purely cost-based rent | 2.5% |
Only the “low” scenario (negative rates, low inflation) reverses the ranking.
Worked example for a building
Fictitious case calculated by OAKS from UBS averages: eight flats let at CHF 2,500 per month, no works, no change of owner.
Regime | Monthly rent after 10 years | Annual building income |
|---|---|---|
Current law (1.8%/yr) | approx. CHF 2,990 | approx. CHF 287,000 |
80% CPI (0.8%/yr) | approx. CHF 2,710 | approx. CHF 260,000 |
The gap reaches about CHF 27,000 a year after ten years, or roughly CHF 770,000 in value capitalised at 3.5%. This is illustrative only: UBS stresses that potential value losses cannot yet be reliably estimated.
Expected market effects
- lower appeal of rental buildings for private and institutional investors;
- slower creation of rental housing;
- more conversions of rental buildings into condominiums.
Our advice to owners
- Don’t rush: no bill exists yet and no referendum date is set.
- Measure the gap between your current rents and market rents.
- Document value-adding works, which would remain chargeable.
- Include the regulatory scenario in any valuation or medium-term sale plan.
Key takeaways
- A statistical reference rent would replace the absolute method.
- Indexation would move from 40% to 80 or 90% of inflation, unlinked from the reference rate.
- In UBS’s base case, existing rents would rise 0.8% a year instead of 1.8%.
Frequently asked questions
Has the rent reform been adopted?
No. It is an option outlined in an FHO report. A bill should go to consultation in the first half of 2027 and to Parliament by the end of 2027.
Would rents still follow the mortgage reference rate?
Not under the option studied. Existing rents would follow 80 or 90% of the consumer price index instead.
What is the impact on a rental building’s value?
If permitted rents stay below market for long, yields and values may fall. UBS says the extent cannot yet be reliably quantified.
Source
UBS Switzerland AG, Chief Investment Office GWM, “Swiss real estate”, Thomas Rieder, Matthias Holzhey and Fabian Waltert, 30 October 2026. The worked example is an OAKS GROUP calculation based on UBS averages.
For information only, not legal or investment advice. AI-generated illustration.
