Coming from small town midwestern America, the land of apple pie, picket fences and 30 year fixed mortages, I grew up thinking of renting as a transitory condition. A necessary first step on the road to independence, but nonetheless one that should be dispensed with as soon as possible. Property ownership was a mark of stable adulthood, it was the first and probably most important sign of establishing roots.
This was reinforced by the tax system. Esto, you mentioned involvement in the community; where I come from a renter does not pay any (or not much) tax to the local community - revenues to support the schools, firemen, police, local library come from property taxes, paid by property owners. In a sense, it is often felt that a renter does not have the same stake in the fate of the community that a property owner does. Because of that view, society encourages home ownership, and sets policy along those lines. Home ownership is seen as something in the public interest.
(Obviously a renter indirectly pays these things in the form of rent to the owner... but we are talking about a state of mind here.)
But Switzerland is different - we cannot make the same assumptions as to what home ownership means within the society.
With the Swiss tax system, it is income tax that provides the local community with the needed revenue. This means that everyone - renter or owner - contributes. We all support the community, we all belong, we all have the same stake in the future of our neighborhoods. And, unlike where I grew up, renting is not a transitory state. I am a home owner yet think nothing of upping sticks, selling and buying somewhere else as my life changes. Despite my entrance into the Grundbuch, my ties to the community are weaker than my neighbors who have been renting their place for the last 40 years.
The 'Swiss Housing System' has not been seen by most as a problem, at least it wasn't until the latest rise in both housing prices and rents. (But that is the fault of all those danged furriners...) and therefore there hasn't been much of a call for change. But it's the price of housing - renting and owning - not the lack of opportunity to own a home, that is getting people upset.
Home ownership is simply not seen as an intrinsic value as it is in other places. Just a cultural difference.
I own a home because I'm too much of an American - I need my very own plot of ground for emotional reasons as much as practical and financial. YMMV.
Point of interest: Eigenmietwert was introduced as a way to level the playing field. Home owners can deduct mortgage interest and suchlike, renters cannot. Eigenmietwert was designed to eliminate what was seen as an unfair advantage.
Right now interest rates are very low so the Eigenmietwert is sometimes not offset by the deduction - but once rates rise (as it is predicted they will) most homeowners will see a balancing out. But even with the out-trade I have today, ownership is still far cheaper than the exorbitant rent I had to pay when I moved here as a clueless expat with no German and too many dogs.
Having recently bought a house, I was a bit confused by all the strange laws and conditions, and the fact that you are not encouraged to own more than 34% of your house, with the bank owning the other 66%.
If you look a bit deeper, it kind of makes sense in a Swiss kind of way. The money that would normally be paid towards the principle of your loan can be put into an interest bearing offset account, of which all the payments are tax deductable. So in a roundabout sort of way, you can pay off your principle, but into a different account, I know its strange, but it kind of makes sense. About as much sense as not being able to vacuum your car on a Sunday, but hey, this is Switzerland.
I come from a country (Aus) which has home ownership as the holy grail, and unfortunately, in the last few years, the dream has become a total nightmare for those wanting to enter the market, and there is no way I would be able to afford the same house, my payments would nearly be 4 times as much. As well as the negative gearing tax breaks in Australia which do nothing but fuel debt ridden speculation, and a culture obsessed with selling ever more expensive real estate to each other has created some of the most over inflated real estate prices in the world. Some of the prices being asked for clapped out workers cottages would even make a Zürich banker a shiver in his shoes.
Add to that every time the country seems to be a risk of inflation, the RBA jacks up the interest rates, people are paying close to 8% on their loans, over half of their before tax income on just providing a roof over their heads and next to no renters rights so your overstretched landlord can (and does) jack up the rent whenever the interest rates rise......that seems even more crazy
Switzerland has a very sound retirement system in which people can afford to pay their mortage/rent once they have retired. Property speculation is not encouraged and hence the prices here are (for now) pretty stable, expensive, but stable.
Just my two cents.
Land costs are also huge, which is tied in with land availability. Rezoning is a slow and painful process here. Right now, while we're looking for a place, I wish they were a bit liberal with rezoning. But when I fly back to Canada and look out the plane window as we descend towards Toronto, I think maybe it's not such a bad idea to keep the strings tight...
By the way, house prices in most major Canadian cities are now approaching Swiss levels, the salaries are not equivalent, and the taxes are eye-watering, so I feel fortunate compared to my old friends back home.
When thinking of house prices in Switzerland it is important to remember that many Swiss pension funds are required to hold a high percentage of their investments in Swiss property and of course this has a big impact on house prices.
Good luck with that,
Jim.
What town is that? Am I missing something?
As for prices in Canada/Australia, I can't speak for them, but where I grew up on Long Island, about 30 minutes outside of NYC, average house prices are about between $300-500k. If you took that same house and put it 30min outside Bern it would cost about 1 Million CHF. If you put it near Geneva or Zürich, God knows what it would cost...
http://www.homegate.ch/kaufen/103474243
It is a 15 minute drive or 28 minutes with public transport to Bern.
Wangenhubelstrasse 33
3173 Oberwangen b. Bern
ländlich
Row house
Number of rooms: 5.5
No. of floors: 3
Living space: 166 m2
Floorspace: 127 m2
Land area: 150 m2
Room height: 2.43 m
Year built : 2011
Volume: 619 m3
Available: 01.10.2011
Selling price: CHF 628,000.--
Mortgages from CHF 1,386.- / month
It's not always financial beneficial to own your house outright.
If you take the slow rise in prices over time (about 5%) and the low mortgages rates, then you could make more money in other types of investments. I think someone else also mention that you are indirectly paying off your house by putting the funds into your retirement account.
Also, remember that owning houses outright give people less mobility. Recently I read an article that about the countries with higher % of out right ownership historically always had higher unemployment rates. If you biggest asset is a property, you can't really move to find a job as easily.
They don't have the flexibility in the American market and that is why the economy is so largely focused on "home ownership". They don't see any other way for people to be so-called secure for their retirement years. Well seeing that millions of homes are in foreclosure now, and the economy has gone bust this idea is seemingly coming to a close. A disaster Switzerland was able to avoid. Material ownership in Switzerland is not an obsession like that the Americans have. Like having the biggest car, or 3 cars in the driveway etc...Not saying some Swiss don't have these things but basically if you see someone in Switzerland with these things they can afford them. You won't have someone who works at McDonalds buying a home, or working 2 andf 3 jobs in order to pay the mortgage. In Europe people normally buy when they can afford it-most of the time.
Here are some, 35 mins away in Biel:
http://www.homegate.ch/acheter/10348...ault&l=default
http://www.homegate.ch/acheter/10348...ault&l=default
http://www.homegate.ch/acheter/10348...ault&l=default
http://www.homegate.ch/acheter/10350...ault&l=default
http://www.homegate.ch/acheter/10351...ault&l=default
There are more. So, go have a look on homegate.
ETA: I <3 this one! It's more than your budget and further away... but personally, I <3 it. So you should consider it!
Another one , again about 5 or 10 minutes from the station in Langenthal
Or what about Wynau ........
This is a nice one in Holderbank , but you'd need to use the Bus....
Or this one at Aarwangen
These are all within easy each of Bern and even after pumping some cash into them to bring them in to line with your wishes, you'd still be along way short of 1M....
Jim
Brits and Americans are obsessed with owning a property as in those countries renting has the stigma of failure, much the same as travelling by bus has the stigma of failure which is why everybody over 30 owns a house and has a car if they possibly can and the whole system has grown around that belief and expectation and hence perpetuates it.
In Switzerland, that is not the norm and you aren't considered a failure if you don't fit in that category. Hardly any of my friends here own a property (even the ones who make good money), but they invest heir money in other ways.
In the UK, the government would never dare go after home owners in a big way because they would insantly alienate the majority of the population. There is safety in numbers and if you put your money into a house there it's pretty safe.
In Switzerland home owners are a minority and the tenants are the majority which is why the government is careful not to step on the toes of tenants but doesn't mind being rough on owners. Again there is safety in numbers. Hence my advice, forget what they told you back home and do as the majority does no matter where you are.
For comparison, 30 minutes outside Toronto (without a rapid transit connection), plywood-and-drywall new builds or 1960s wood-frame houses on 50'x125' lots are selling in the 500'000 - 600'000 CAD range, and you can literally blow a candle out on the drafts through the wall seams and windows. Traditional 1300 square foot brick row houses near the University of Toronto are over a million.