One in six people in Switzerland spends over a third of income on housing

One in six people in Switzerland crosses the one-third mark for housing costs, according to a Comparis survey published on Thursday, 23 October. The survey found that 16% spend more than a third of their income on housing, a share that climbs to 22% among tenants. The one-third figure is a widely used rule of thumb for keeping housing costs manageable. Comparis property expert Harry Büsser calls it a warning threshold: spending above it over time can force households to cut back on essentials such as healthcare and retirement provision.

Comparis surveyed 1,038 people in August. Its findings point to a burden that falls unevenly across households, with lower-income earners much more likely to breach the guideline. Homeowners face the same test, though a smaller share exceed it. The figures offer a snapshot of household pressure in a country where demand for homes in prosperous cities has outpaced the supply of places to live. For renters in particular, housing costs can take a sizeable bite from income before other bills are paid.

The pressure is concentrated among households with lower incomes. Comparis found that 36% of households with gross incomes of up to CHF 4,000 spend more than a third of their income on housing. Among households earning more than CHF 8,000, the share falls to 6%. That sixfold difference shows how the same housing market can weigh very differently depending on a household’s earnings.

The one-third guideline matters because housing is a large, recurring expense. Büsser says that when households persistently cross the threshold, they risk having to reduce spending on healthcare and retirement provision. The survey’s income breakdown makes clear that this risk is not evenly spread: more than one in three households in the lowest income group surveyed exceed the guideline, against fewer than one in ten in the highest group.

For tenants, the overall pressure is also higher than for the population as a whole. More than one in five tenants spend above the threshold, compared with 16% overall. The results put affordability in sharp focus for households with limited room in their budgets.

Homeowners also exceed the affordability guideline, although fewer do so than tenants. Comparis found that 7% of homeowners spend more than a third of their income on housing. The result stands out because banks assess borrowers’ ability to sustain mortgage costs over the long term before approving a loan. They generally use an assumed interest rate of 5%, well above prevailing market rates.

Monthly costs nevertheless tend to be lower for homeowners. Half spend less than CHF 1,500 a month on housing, compared with 36% of tenants. Below CHF 1,000, the gap is wider: 27% of homeowners are under that level, against 11% of tenants. At the other end, 17% of homeowners spend more than CHF 2,000 a month.

Büsser cautions that monthly comparisons leave out important costs. Owners have equity tied up in their property that could otherwise earn a return, and they must pay for maintenance, renovations and major repairs. Buying can make financial sense over the long term, he says, but lower monthly costs alone do not prove that ownership is cheaper.