Credit Suisse: Housing, Commuting, Childcare: Where is the Least Expensive Place to Live? Dienstag, 13. Dezember 2016 - 10:00
Living costs are not the same across Switzerland. Swiss households can generate considerable savings and optimize their budgets by moving to a different location – not necessarily far away. Freely disposable income is a broad criterion for assessing the financial residential attractiveness of living in a particular municipality. The measure includes all costs associated with the location. Since 2006, Credit Suisse economists have calculated freely disposable income in the 2,300 or so Swiss municipalities and districts of the country's major cities for a large number of typical household types. The latest issue also includes spending on childcare at a municipal level.
There are many factors to be considered when choosing the "right" place to live. Alongside the area and its infrastructure, the availability of appropriate housing, emotional criteria and personal networks in a particular location, financial factors also play a key role. According to Credit Suisse economists, households assessing the so called financial residential attractiveness of a particular location should not only consider the tax burden but also other mandatory charges such as health insurance premiums, as well as the mechanism for calculating rental levels for homeowners. Furthermore, fixed costs tied to a particular location, such as rents, real estate prices and commuting expenses, are a major factor for household budgets.
Cantonal Ranking: Uri Defends Its Top Spot
As in the last survey in 2011, Canton Uri has the highest financial residential attractiveness, followed by Glarus. In addition to cheaper housing costs, both cantons offer moderate taxes and comparatively low health insurance premiums. By contrast, the "big-city" cantons of Geneva and Basel-Stadt are still positioned at the other end of the rankings and well below the national average. In these cantons, for the same income there is less money left over at the end of the month for discretionary spending compared with suburban or rural areas. According to Credit Suisse economists, low fixed costs or low mandatory charges can result in a high level of financial residential attractiveness. The cantons of Jura and Zug, for example, have similar financial residential attractiveness at only just above the national average. High housing costs in Zug prevent the canton from having a more attractive position, while in Jura the above-average mandatory charges are to blame.
External Childcare: Cheaper in French-Speaking Switzerland
Families with children in external childcare can benefit from government support depending on their financial means and the type of provision. The impact of childcare on family budgets varies significantly depending on the location. A typical family with two children, both of whom are in daycare for two days per week, and a gross earned income of CHF 80,000 will pay costs ranging from under CHF 3,000 in Canton Bern to over CHF 26,000 in other parts of the country. The maximum tax deductions for childcare costs also vary sharply. These range from CHF 3,000 in Canton Valais to CHF 19,000 in Canton Neuchâtel, while Uri has no upper limit. In overall terms, the cantons of Valais, Jura and Fribourg are the cheapest to live in for families with children in external childcare. According to Credit Suisse economists, family allowances, daycare subsidies and deductions for childcare tend to be higher in the cantons of Western Switzerland than in German-speaking regions of the country, making the Suisse Romande more attractive for families with children in external childcare.
Commuting Costs: Reduced Deductions for Car Drivers since Start of Year
70% of all employed persons work outside the town they live in. Around half of commuters use their own car to get to work every day, while one third use public transportation. Despite higher mobility costs, moving to suburban municipalities is worthwhile in most cases – purely from a financial point of view. Lower housing costs mean it is usually cheaper than living in urban centers. However, the additional time involved, uncertainty caused by traffic jams and delays, as well as other non-monetary factors, need to be added to the direct costs. To achieve its environmental and spatial planning objectives, the federal government halved the maximum commuting deductions to CHF 3,000 at the start of the year. Living in a more remote area therefore becomes less attractive, and the demand for centrally located accommodation is correspondingly greater. Various cantons such as Zurich and Basel-Stadt have followed the federal government and reduced their commuter deductions. Residential regions heavily dependent on commuters nevertheless continue to allow unlimited deductions in terms of cantonal tax calculations. They include Uri, Glarus, Graubünden, Valais, and Fribourg.
The Bottom Line: Freely Disposable Income
The financial residential attractiveness of a particular municipality can be illustrated on the basis of freely disposable income. This shows the sum of money available to households for discretionary spending after including all income components and after deducting mandatory charges and fixed costs. Since this figure varies depending on the specific characteristics of a particular household, Credit Suisse economists calculated the freely disposable income for a large number of typical household types in the 2,300 or so Swiss municipalities and produced an indicator for freely disposable income in the Swiss cantons and municipalities (Regional Disposable Income or RDI indicator). Figures above zero indicate that freely disposable income is higher than the Swiss average, and figures below zero that income is below average.
Top Places to Live in the Agglomerations
Factsheets for Swiss Municipalities and Urban Neighborhoods Results at municipality level are available in the form of factsheets for each municipality and urban neighborhood as well as for the cities of Zurich, Bern, Basel, Lausanne, and Geneva. Credit Suisse clients can obtain the factsheets from their client advisor; media representatives please contact Media Relations Credit Suisse AG (contact details below).
Please find below Samples of factsheets:
Factsheet_Interlaken
Factsheet_Billens-Hennens
Factsheet_Würenlos
Factsheet_Giubiasco
The publication “Housing, Commuting, Childcare: Where is the Least Expensive Place to Live?" is available online at: www.credit-suisse.com/research.
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