Why are house prices still rising? I thought the already sky high prices and higher interest rates would dampen demand. Not to mention economic fears caused by Iran war.
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Economics 101. Law of supply and demand. Not saying that the demand makes any sense whatsoever but as long as people are prepared to pay higher prices you will see increases.
Supply has never kept up with demand in Switzerland, at least not this century.
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Supply and demand. The population is increasing due to immigration and immigrants are more likely to come from countries where home ownership is the norm. Added to this is the shortage of housing, both to buy and to rent. The economic fears (which have happened before) have not yet resulted in the Swiss economy really suffering in general. A key event is the coming 10 million initiative. Although it seems like a solution to the problems, if accepted it is likely to have a series of very negative impacts on the economy and on house prices.
There’s some uncertainty about the future but no significant inceease in unemployment or bankruptcies. On average, people is as well as last year.
The issue is that no one knows the future. People buying right now may do well, or we will see stories in the news in 3 years about people selling their recently acquired house because they can’t keep up with the mortgage payments.
If things go wrong, demand has to go down. But things have to go wrong first, not only worries about it.
Well increasing interest rates is what killed the market in the late 80s, early 90s. There were some bargains to be had and I am a little chagrined to say we took advantage of one that came along unexpectedly. Mind you we are in the same house over 30 years later so we can’t be accused of flipping the property.
Our big challenge now is how to release some of the equity out of our home without having to leave.
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Indeed
I always find it incorrect when they evaluate old people’s quality of life/financial wellness here that they include Vermogen (Capital assets) but without including liquidity.
I am a home owner but if I want to go out for dinner I cannot sell a square meter of my bathroom to fund it.
I could sell the whole property but if I go to rental then I will see a big increase in my outgoings which would not be comfortable.
The supply of single and duplex houses is dropping, as towns prefer higher density constructions..which allow for more taxpayers per metre of roadway. But families want houses, so they are prepared to pay more for them.
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The other question is who can even still afford to buy a house? In Basel, you’re looking at a minimum of 1.4m to buy a house and there were quite some job losses over the last years with Big Pharma.
I wondered whether there could be a reducing number of people who could afford to buy a house which would lead to slowdown/reduction in prices.
From WRS this morning.
Owning a house in Switzerland is becoming increasingly rare, according to a new analysis of the property market.
Just over a third of residents now live in houses, down from nearly 38 percent in 2010, placing Switzerland last among 40 countries studied.
Experts say high demand and rising land prices - especially in cities - are putting home ownership out of reach for many, despite strong salaries.
Surveys show the desire for outdoor space remains high, but out of reach for many families.
Living in a house, owning a house and home ownership rate are three different things. You don’t have to own a house to live in a house and home ownership rate includes apartments as well.
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This came up yesterday in 20min:
anteil der bevölkerung, die in einem Haus lebt = proportion of the population living in a house. Around 40% in 2008, 34% today.
When you look at people per household, the numbers make a lot of sense: 37.4% of 1 person households, 26.6% of couples without children, so at least 64% of households with 1-2 persons.
Everyone is free to do with their money whatever they want. Anyway, living alone in a big house is a bit odd. Couples without children can live in a house if the desire for garden is overwhelming, but an apartment is fine too. It seems that beyond the prices and the affordability of houses, the growth in apartments and fall of houses is just a reflection of people living alone and 2 person households.
So, why put 1.4 million into a house when you’re doing absolutely fine in an apartment? If money is not a concern, house is fine. If the 1.4 million could mean early retirement…screw the house in Switzerlad hahaha
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“Families want houses” Not necessarily. Our kids grew up in a suburban rental estate. Kindergarten in the estate. Primary school within easy cycling distance on cycle paths or very quiet streets. Lots of other kids available so no need for play dates - just meet up in the car free zone. Forest nearby.
This is why there is so much competition for flats that on the surface are all similar. It is not just about the rent.
OK, it is not so easy in the centre of Basel or ZĂĽrich but most Swiss people do not live there.
That’s what my elderly neighbours do. The kids moved out. Then they retired. Then one died so the other remains alone. They lived there since the early 70s so not going to go through the stress and hassle of moving for the remaining years they have.
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Why move? Their remaining mortgage payment (and costs) would be a fraction of the rental cost for a one bedroom flat. Assisted living would eat up any equity in just a few years.
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If they have the money to pay for it, let them enjoy it. The issue here is lots of younger people which are also alone and not looking for a house.
I sense a narrative about evil government or market forces constraining the supply of houses. But, the trend can also be explained by all the people living alone, this explanation does not require many assumptions.
1.4 million is a 3-rooms apartment in our village.
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That’s the price Phil_MCR gave.
I live in a non-aspirational area in Aargau. The beautiful people don’t live here, prices are different. Anyway, we’re talking 1+ million because surely something needs to be fixed.
Back to living alone, I can’t imagine living alone and keeping this big house properly. I’d had to pay cleaning, gardening, etc. I’d would be able to keep up with that work up to a certain age, but as Phil_MCR mentioned, 70+ and keeping the house in shape…that requires cash that IMO is a big opportunity cost.
It can be difficult in an apartment if you have unpleasant neighbours, you have more chance to avoid them in a house.
Weekly cleaning person a maximum of f60 week or 260 month. 10 hours of gardening for 8 months of the year f400 month.
Average rental for 1 bedroom flat is 1650-2000 per month (2,900 in ZH/GE) if you can find it.
No brainer stay where you are comfortable, neer familiar shops and friends.
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Sorry, but is this legal?