Interesting that since we bought our appt in Q4 2009, house prices have risen more sharply in CH than in any neighbouring country and the US and UK.
Quite an eye opener how little Swiss property has gone up in 40 years, with some of the huge recent rises, I see a lot of pain ahead.
yup. we're above the 90s boom/bust prices in nominal terms and almost there in real terms too.
The most dangerous thing that's always said is 'its different this time'......OK B permit holders can buy an any EU citizen can get a B permit , however you expect big falls over the next 15 years.
I think the B permit holder is a significant factor, vastly increasing demand. But we already had the perfect storm of: prices at low point in cycle, increased buyer base, solid economy, high immigration, ability to use pensions as deposits, low % of owner occupiers, low building rates, QE, low interest rates.
Most of these have reversed, or will reverse, making buying an extremely risky proposition.
The only way I see this ending without a massive crash is: prices stop rising, new building slows, interest rates remain low for an extended period of time, rents increase and improve rental yields.
Yep, you anticipated the sideways push from the over-priced Riviera and go your timing right- well done. As said, location, location, location- and that applies to CH too. There are many in the UK who have not seen any price rises either, in many Northern areas. What is happening in London, Kent and central South is not replicated in other parts of the country.
Big falls in CH will only happen where a bubble was artificially created.
The biggest price falls could be expected in the rural or places with not that developed economy etc, everybody says the riviera has the most expensive apartments etc, but that is for a reason. All the good paying jobs are here.
If prices fall due to increased interest rates, rent will go up as well. If rent goes up, buying will be attractive due to price/rent ratio, so there we go, back at square 1 again.
What do you think will happen to your shares if property prices decline FMF? I guess the same
More and more immigrants come to Switzerland and they need to live somewhere.
I expect we will have to agree to disagree on this one. Many people would prefer to have a slighlty less paid job, but live in an area where they can afford a much bigger and better property, be it bought or rented- have more space all around them, etc- which they would call better quality of life. Horses for courses, of course. Prices in the Fribourg area have gone up hugely as many have realised this, same for the Gros de Vaud and the foot of the Jura (not where I live on the other side of the Jura- but that is fine with me). Some of the larger increases on property to rent have happened in the most surprising of places .
It all depends, but for me you couldn't make me live in Fribourg (not that bad) or Yverdon (looks like Peckham in the 70s)
While the biggest price changes happened in these areas, they will be the first to suffer the eventual drop*, not the places in Geneva, Lausanne or Zurich.
I think it's clear that majority of people would choose to live in places with more expensive lodging because it offers more quality of life actually, that's why everybody wants to live there and prices are higher
*I honestly don't see it happening in the near future
I think population density will show most people choose to live in central locations. The last properties to rise are usually the first to fall.
As said, agree to disagree, and none of us have that crystal ball. Our bank manager previously lived in Geneva- and his comments seemed to agree with my comment above. he was himself amazed on the high returns on apartment blocks in ... La Chaux-de-Fonds
As said, horses for courses- I'd much rather live in Fribourg than Geneva, that is for sure Again, well done PaddyG. I know quite a few ex Genevans who now work in the crême de la crême of the watch industry here- and who have bought wonderful mansions in the area for the price of a 2 bed box in Geneva- and who are VERY happy indeed to be away from it all.
Lol-
I have not known Peckham in the 70s but I get the idea-
Also agree, Yverdon is a dump full of junkies.
Curiously prices are quite high there.
I bring another theory about the whole "bubble", but surely based only on observation of the current market (which is probably a very poor reference, if the entire market change).
-I think raising interest rates would indeed slaughter high expensive properties in city areas, as no one would want to buy them, and therefore low demand, high offers, prices will drop.
But I think another dynamic will hit medium expensive properties in remote area:
-Prices would indeed lower, but not a decrease as high as the other ones.
Example if "city" prices which are extremely high will get -35% average, then I suspect remote area will get maybe -15%. (fake numbers for illustration)
Why? Because I suspect they are targeting different buyers, and because the offer of the second type of property will still be more advantageous than renting in "city zone", so there will still be a market.
Also, I see that these rural markets are entirely controlled by older people who don't seem to care about selling fast. So I doubt that they will "follow the consequences" of the bubble, as fast as it would be in the cities when bursting.
I also know a bit the market area mentioned by Odile. It's true that some area have raised in the last few years, but it also seems to stagnate now on the offers, and it seems that there are less demand*.
*based on regular talk with colleagues and observations of the adverts on a regular basis. for example there are many new constructions, but despite false adverts saying "already sold, already sold", many are still on the market for many many months.
What's your objection to Fribourg? It's actually a great place to live. I wouldn't live anywhere else in Switzerland.
Since a couple of months I'm seeing 20-30 year old houses in/close to Yverdon for around 800-850k. That wasn't the case during the previous couple of years.
The downward drift of prices persuaded me to continue renting for another year.
For how long? because it seems they appeared a couple of months ago, and remains there.......... until you see thanks to comparis "historical prices" that they lower the price by a few thousands chf, then it remains there.... until they reduce again...
I think it's just unrealistic landlords who expect way to much, are not in a rush to sell. But the market reality makes it that they are unlikely to sell.
Also you still see those houses because they don't sell, if they would be "interesting" (lower price) or "correct market price", then they'd be gone very quickly, possibly you would not even notice them.
As said, Paddy got his timing right- he bought in Fribourg before prices started to be hiked up by sideways drift to over-priced Riviera. So you may well be right (or not... yep, where is that Crystal Ball ).
Glad we bought a home we love rather than an investment- and that our time of life it will only affect our kids' inheritance
That's true, It might even change the other way-
What I should have said that it's "unlikely to change soon" (let's say next 12 months).
But also, as those owner can afford not to sell empty properties for years, I guess they don't mind not selling anytime soon, and can afford to wait for an eventual price hike.
Tell owners in Tokyo about an
'Eventual price hike' of course Tokyo had 100 year mortgages, what could possibly go wrong
Look this chart:
http://en.comparis.ch/immobilien/preisentwicklung
For example one can see that between 2007 and 2014 (7 years only), prices have raised +62% in average around Zurich!!
Bubble or not, it shows 2 things:
-Prices have incredibly raised fast and abnormally
-Landlords trying to sell old properties are really trying to skim newcomers, as only a few years ago their property was worth peanuts and now they are trying to surf on the trend and only accept high prices.
I think that buyers should could down and not buy old stuffs in bad locations as the prices could as well revert back as "-60%", which would be a financial killer.
Any thoughts?