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Appenzell Innerrhoden, Uri and Glarus are the most affordable places to live
The cost of living varies from one part of Switzerland to another. Credit Suisse economists have calculated the total disposable income – i.e. the amount of household income left over for discretionary spending or saving after deducting all mandatory expenses and fixed costs – of more than 120,000 sample households across every municipality in Switzerland. The cost of living is highest in urban centers – particularly in the cities of Geneva and Zurich. However, there are numerous municipalities with a commuting time of no more than 30 minutes from these urban centers – making them considerably more appealing places to live from a financial perspective.
For many people, choosing a place to live is one of life’s most important decisions. Money plays a crucial role in the decision, as do location and infrastructure, the availability of suitable properties, emotional criteria and personal connections. Based on calculations by Credit Suisse economists, the Canton of Appenzell Innerrhoden has the lowest cost of living for the average household; this is followed by Uri and Glarus (see Fig. 1). With their low housing costs, coupled with low levels of tax and other expenses, these are the three most affordable cantons. Next in the rankings are more rural cantons such as Schaffhausen, Jura, Appenzell Ausserrhoden, Valais and Thurgau. Several differently positioned cantons with rural or suburban characteristics come midway in the rankings. Compared with the rest of Switzerland, the mainly urban cantons of Geneva and Basel-Stadt, as well as Vaud, Zurich, Basel-Land, Zug and Neuchâtel, have a below-average financial appeal. High rents and real estate prices, along with high non-discretionary expenses in some cases, make it more expensive to live in the city centers.
Valais is cheapest place for families to live
Individual cost factors vary not only from region to region but also depending on the type of household. The analysis by Credit Suisse economists shows differences in the rankings for families with children in particular. This is attributable to regional variations in family allowance, childcare costs, as well as family-specific tax parameters such as child allowance. On balance, Valais offers the cheapest living conditions for couples with children compared with other cantons. This applies both to families requiring institutional childcare (see also Credit Suisse study on childcare costs in Switzerland, May 16, 2021) and to those without such childcare needs. The financial attractiveness of living in a particular region depends in particular on a household's income level and wealth, the type of accommodation desired (small rental apartment or large single-family dwelling), plus many other factors. By moving to a different location – in some cases within the immediate vicinity – Swiss households can generate significant savings and improve their finances (see example of a model household).
Model household of a family with two children: The Schmids, residing in Liestal (Basel-Land)
Hypothetical example of a married couple with two children
The Schmids and their two children live in a 100 m2 rental apartment in Liestal. Mr Schmid commutes to work in Basel every day by public transport; Mrs Schmid works from home while the children are at school. The couple have a joint gross income of CHF 80,000 and savings of CHF 50,000. Including family allowance and investment income, their gross annual household income comes to around CHF 86,000. After paying all non-discretionary expenses, the family has disposable income of CHF 58,700. Once they have paid their rent, as well as ancillary and electricity costs plus the cost of Mr. Schmid's travel pass for use on public transport, the family is left with the sum of CHF 29,400 to spend as they wish.
A short while later, the Schmid family moves to Kaiseraugst (Aargau), where Mr Schmid's parents live and where they have found a similar apartment. This increases their disposable income by approximately CHF 8,900 to CHF 38,300 (+30%), the main contributory factors being cheaper rent as well as lower health insurance premiums. At the same time, Mr Schmid's commuting time and costs are practically unchanged.
The study ‘Financial residential attractiveness: Here’s the least expensive place to live’ is available online in English, German, French, and Italian at: credit-suisse.com/rdi