May 2011 Credit Suisse report: "Living and Commuting: Where's the Least Expensive Place to Live? Disposable Income in Switzerland"
ZURICH, SWITZERLAND – Credit Suisse’s latest annual study of the cheapest place to live in Switzerland includes for the first time the cost of commuting.
Travel costs can be a critical factor for anyone considering moving out of a city to benefit from the cheaper lifestyle in the suburbs or Swiss countryside, but the study turns up some options that will surprise residents of La Cote, the strip between Geneva and Lausanne.
Credit Suisse has been running its “Living and Commuting: Where’s the Least Expensive Place to Live?” report since 2006. It bases its conclusions on a study of households in 2,700 municipalities, using a mix of household types to determine freely dispoable income.
Uri comes out cheapest in 2011, with Geneva, Vaud and Basel continuing to be the most expensive places to live when all costs are added up.
Average freely disposable income in Switzerland: CHF57,690
The average freely disposable income in Switzerland is CHF57,690, according to the bank. “The bulk of the average Swiss household’s gross income, around 76.4 percent, is earned income. Investment and rental income accounts for 3.8 percent of gross income, while transfer income and pension/social insurance payments add up to 18.1 percent. This proportion has decreased by 2.4 percent since the last calculation in 2006, the base year, after having consistently risen for many years due to the aging population. The reason lies in a disproportionate rise in incomes during this period.”
Mandatory charges take 29%
Expenditures include mandatory charges: 11.7 percent on average for income and wealth taxes, with social insurance and pension funds (second pillar), and premiums for compulsory health insurance taking 15.1 percent of gross income. Disposable income for the study denotes the sum available to households after the deduction of mandatory charges: CHF77,585.
Fixed costs 18%
Fixed costs were 18.2 percent of gross income: on average, housing costs (11.9 percent), ancillary costs (2 percent), electricity and energy costs (1.3 percent) and commuting costs (3.0 percent). Deducting fixed costs, the report shows, leaves the average Swiss household with a freely disposable income of CHF 57,690, or 52.8 percent of gross income.
“Freely disposable income is the pivotal financial criterion in the choice of a residential location. It denotes the amount available to households for private consumption, after summing up all income components and deducting all mandatory charges and fixed costs.
Western Swiss urban areas among the most expensive on RDI scale
Western Switzerland in particular comes out poorly on the RDI (regional disposable income) indicator, with Geneva and urban areas in Vaud getting low scores due to a combination of high housing costs and relatively high fixed charges, including taxes. Jura also does poorly, the study shows, despite having some of the lowest housing prices in the country: “its financial attractiveness is dogged by persistently high mandatory charges.”
Including commuting costs shows that “living costs in peripheral urban areas are significantly lower than in the centers, despite higher commuting costs.” Moves of short distances, if the commute is not too long, can bring substantial savings. “The Lake Geneva region is a case in point: Even when allowing for commuting costs, those municipalities in the canton of Fribourg that enjoy good transport links to the urban centers of Lausanne, Vevey and Montreux are considerably more appealing from a financial point of view than the neighboring municipalities in the canton of Vaud.”
The study turns up some surprising differences when you calculate commuting costs, which are not handled the same by all cantons for tax purposes. Uri, which is Switzerland’s cheapest place to live, is the most generous in this respect, allowing all taxpayers to deduct 70 centimes per kilometre for the first 20,000km travelled, even if the taxpayer walks to work.
Most of the cost of commuting to work is tax deductible in Switzerland, but the study points out that this “‘indirect subsidy’ for commuting is politically contentious, as it creates incentives to live further away from one’s place of work. In extreme cases, it leads to tax deductions of over CHF 30,000. Proponents argue that deductibility is justified since commuting is rarely a matter of choice. Most cantons allow the deduction of the actual costs of a 2nd-class public transportation travel pass. In cases where the use of a private motor vehicle is reasonable or appropriate, its operating costs can be claimed in accordance with the standard cantonal rate per kilometer.”
The bank has created sheets on the 2,700 individual municipalities, available on request: media.relations@credit-suisse.com
The full report is in four languages.
One rider's bike, from the 15% who cycle to EPFL
LAUSANNE, SWITZERLAND – EPFL, the federal polytechnic institute in Lausanne, is pushing bicycles and will continue to do so until the end of June, in every sense, with its Bike to Work 2011 programme, which kicks off 23 May.
The school wants “to reduce by 10 percent by 2014 the 30 tons of CO₂ emitted daily by commuting vehicles on normal working days” and its previous Bike to Work programmes have made a good start: 15 percent of commutes are currently done on bikes, compared to 11 percent five years ago.
EFPL is registering Bike to Work riding teams until 31 May and will be giving out an electric bike to a winning team. The goal of this year’s programme is to get people used to riding bicycles for work. “To take part, you have to form teams of four people who are prepared to make 50 percent of their journeys to EPFL or to return home by bicycle, during the month of June”, the call for teams says.
The project is part of the larger Swiss Bike to Work programme, where companies register teams by 31 May, and the teams then ride at least part of the way to and from work 1-30 June, preferably combining this with public transport for the non-cycling part of the trip. The national programme has several prizes that include a weekend for two in Hamburg, to bicycles and bike accessories. Details
A new logo, fresh coat of paint and ID as a commuter boat on Lake Geneva
Lausanne, Switzerland (GenevaLunch) - The CGN (Compagnie Générale de la Navigation) has painted its commuter boats dark blue, given them their own logo with an identity that will be used for signs on quays and elsewhere, and created a web site that also works well on commuters’ iPhones.
The four cross-border lines have been colour-coded and given numbers, like other public transport bus, train and tram lines. Welcome aboard the new NaviMobilité system!
For the more than 1.22 million commuters in the Lake Geneva region who used the seven fast service boats in 2009, the clearer focus on their needs will be undoubtedly be welcome. The new website, navimobilite.ch, offers schedules, prices and practical information far more quickly and easily than in the past, for the four cross-border routes, with up to 92 runs a day between France and Switzerland:
A three-part special on housing and the international population in the Lake Geneva region: part 1
(Also see part 2: Myth and reality: how housing in the Lake Geneva region adds up)
Geneva, Lausanne, Switzerland (GenevaLunch) - Switzerland’s population grew by 1.6 percent in 2007, the highest rate since 1963, thanks to immigration fueled by a healthy economy and the country progressively opening up to the Schengen Area free movement of labour, starting in 2002. One result was to put more pressure on the demand for housing, especially in the Lake Geneva region where demand has long been greater than supply.
A new peak in housing demand in 2008 in canton Geneva coincided with new construction falling off, leaving Geneva with an apartment vacancy rate of 0.25 percent on 1 June 2008, the date when national figures are compiled.
