I am relocating to Switzerland in January on a local contract and a type B work permit.
I am planning to stay in a temporarily accommodation for 1-3 months until I secure my permanent accommodation. I have been looking at the different options and my question is regarding buying an apartment in Switzerland for foreigners.
I learnt that Type B work permit residents can buy and obtain one mortgage for an apartment that they will use to live in.
Providing that I will pay a reasonable advance deposit and the mortgage is within the 33% limit of the net income, how long would this process take from the day of arrival to apply for mortgage, obtain an approval and actually buy the unit?
Is it feasible to stay in a temporarily accommodation for up to 3 months until this process is completed, or is it too lengthy to do so?
Also, how easy or difficult it is in Switzerland to obtain mortgage if you are a new arrival and don't have a credit history in the country?
Has anyone gone through this process can share his/her experience?
Most people will want to check out in which area they want to live before buying.
You could buy something in 3 months but you will most likely have issues getting a mortgage as you are new in the country (unless you have a ridiculously high income).
The location is decided already, we are planning to stay in Baden/Brug area (AG).
Yes, I am aware of the extremely high house prices, as well as the equally high rental rates. My view is at least for buying it is a lot of money, but in the pocket, while for rental it is equally a lot of money, but in the black hole! I understand there is a difference for sure, have done my math, but my question here is really regarding the procedure and the likelihood of the bank to grant a mortgage to new comer.
As said, that depends on your income, how much money you have. I doubt that banks will give mortgages to people who are new in the country and still in the probationary period of their employment.
If you want to buy property within 3 months, you basically need to find a property that's empty - which is not that easy but also means that the property is likely not very attractive (otherwise it wouldn't be empty).
Then you need to put in at least 20% of the buying price.
And then trying to get a mortgage while still in your 3 month probation time. Think what you would do if you were in the bank's shoes
I understand it wouldn't be smooth and lean as one could dream of, but if the 20% is readily available via overseas transfer and the probation is not in question because of long years of service at the same organization, would that make it feasible?
Great, but the bank giving the mortgage are highly unlikely to give you a mortgage until they see a good track record and you have been here for a few months.
They may consider if you put 50% down.
You also need to take into consideration notary fees which, in Vaud are around 5% of purchase price.
Switzerland is very different from Safrica, you may not like it here and in which case buying may turn out as a very expensive option; notary fees to start with aren't re-imbursable.
Hello and welcome to the Forum, and soon to Switzerland.
One of the reasons no-one here is answering “Yes, yay, super, you can do it within 3 months!” is the general scarcity of property to buy. There’s just not a rapid turnover. (Also - though if you’ve done the sums then that doesn’t apply to you - most people in Switzerland really do live in rental properties, much more so than in some other countries.)
Don’t worry if the threads seem a little older, as things in Swizterland change very slowly, so much of what you read here will probably still apply. One caveat: the actual rules are different (not just for property but for many, many aspects of life) from Canton to Canton and even sometimes from municipality to municipality, so when the time comes, you’ll need to check the fine details in the area in which you spot a potential property.
There's plenty of property available. Just not in the 750k to 1m bracket.
Go above 1.5m, and there's more to choose. Above 2m and there's room to negotiate because most of them are old and overpriced (and often need serious remodeling).
E.g. a house in the Gemeinde I previously lived in is still for sale after probably more than a year (if not two years). It's from 1977 and currently priced at 2.7m. Renovations are ultra-expensive these days, so the prospective buyer would likely need to shed out several hundred thousands more just for renovations.
OP hasn't disclosed just how solvent he is (and it's irrelevant for the discussion).
Real estate can be very illiquid here, depending on price and location.
Owning isn't free either. The Eigenmietwert will lead to a higher taxed income (I'm sure most of this explained in the links).
I'd stay in temp accommodation and see when you can get. Buying at the equivalent of 25-30ish times yearly rent isn't really fun unless the property is worth it IMO.
Sameh, as others have shared, if you can make a sizable deposit and have a good monthly income, it might be easier to get a mortgage. It could be, though, that the interest rates might be higher and you most likely get better rates if you approach the bank after 6 months of working here. Also, if you have a car, it might be easier to find less pricey options in the countryside.
I would normally prefer buying an apartment/house over renting, but Switzerland is the one country where I would rather make an exception due to the various hurdles, including the high costs of buying and owning a property.
To be honest I wouldn’t rush into buying straight away. I’d wait at least a few months minimum or even a year or more to make sure that Switzerland is the place you want to be long term. If you buy quickly and then for whatever reason decide Switzerland isn’t for you, you may have problems selling the property. Some properties can stay on the market for years before they manage to get sold. And I’m not just talking old and decrepit places either. There’s one down the road from us in the next village which has been completely renovated and has been up for sale for 3-4 years now.
The Swiss housing market is so tight - in desirable areas - that here is basically no market. You need to get a grip on what it’s like and then you asses whether you are being ripped off.
I’ve bought twice (and sold once). It took two years each time to find a property that was re-sellable. Much of what you may find on the market is only only the market because there’s a problem - or two or more...
I have clients who relocated to the Baden/Brugg area and some bought not long after they arrived. It isn't just about money, it is also about where you want to actually live and what type of property you are looking for. Staying in temporary housing or renting provides the opportunity to explore different areas and view properties on the market. You might also discover that you prefer to live further afield or in a completely different area.
As you wrote in another post that you have a relocation agent, I hope this person helps you find a suitable rental in your preferred location.
At the moment property prices are falling (one local apartment sale price was just cut 10%) but mortgage rates are rising so it is difficult to answer whether it is a good time to buy or not.