Hi, I’m contemplating whether to buy 1.5 studio in the city or 2.5 (or bigger) somewhere farther away, 40 min to 1h from HB, in nearby cantons. Living in canton Zurich vs Argau/Thurgau doesn’t make me any difference.
Obviously saving time on the commute is a big quality of life improvement, but the Zurich prices constantly reminds me about houses price crash cycles (however long they are). I wonder what’s your thoughts, and experience, in that matter. I plan to live and work here another decade. I’m skeptical if it’ll be possible to work till retirement (nor if I’d want to), so I might want to sell the property then. It’s strange to me that I can find much much more property offers within the radius 40-60min from ZH, then double the price offers in the city. In the end it looks like Zurich city property market is more volatile, am I drawing the right conclusion?
That’s interesting question. I figured it’s easier than finding a nice apartment, unless you’re willing to go for slightly overpriced apartments, but then you have the answer why it seems better to buy.
and obviously there’s some emotional value living in your own property.
My rough calculation still shows half the cost vs renting. Of course some people would argue that I should also add the cost of lost opportunity on the 25% locked down in the property.
This is a key point. If there is no appreciation of value, you will have lost the opportunity of making a return in the market. On the other hand, a 10% appreciation of the property gives you a 40% return on equity. I spare you the calculation if the value goes down.
Whatever you do - Do not overpay for the specific place you are buying.
But a share/quota of the land “beneath” your apartment will be your property too. Last time I checked houses didn’t get any cheaper in Switzerland.
If you can afford a mortgage and have the down payment, I don’t see why you shouldn’t buy. It is a way to protect yourself against inflation…oder? Besides as you too pointed out finding a nice home can be more difficult if you only rent, or you could pay a higher rent than your mortgage could be. Don’t buy a really old apartment though because it could be difficult to sell it again, if you ever wish or need to.
My 2 cents worth piece of advice.
(and I dare to add that it’s a better investment than an expensive car!! :))
A car is never an investment unless you’re a taxi driver. Buying our property here (10 years ago) has so far been the best investment weve made (book value).
As a rough rule of thumb, those who rent and invest their money say it’s the best and those who have bought declare their way is best.
For me (as documented on EF many times) buying is the best investment I have ever made. In short, I bought a flat in north London in 1971 for £5,750. Today I live in a Swiss house worth close to CHF2million. And, I unlike financial investments, I have had a roof over my head for over 50 years.
Property booms and crashes come and go, but you’ve got to live somewhere and as long as the Swiss population increases (6 million in 1989, 9 million today) people have got to live somewhere and property prices will increase long term.
Best advice I had in 1971 was ‘buy as expensive a property as you can’…
THIS! The ability to sell an apartment in 10 years is something to think about.
Right now, there’s still an stock of old apartment buildings with old windows, asbestos, oil heating, those old radiators that do not heat the rooms evenly and floor plan distributions not that attractive to contemporary customers. Those apartments might be the ones offered at a lower price.
It’s worth to consider that basically every apartment built since 8-10 years ago has floor heating, energy efficient heating (geothermal, remote/district heating, air-to-air heat pumps), good windows, green roofs, a parking place where you can comfortably open the door while parked.
I have no crystal ball. What do others think? Will there be a market for apartments with old equipment in 10 years or not?
Anyway, there’s a lot more to see in an apartment beyond 2.5 rooms, price and minutes of train ride to ZH HB.
You do not know that/if/when we’re near the end of a boom cycle.
Yes, buying with a specific intent to make a profit over a fixed period is not the wisest move perhaps, but if you could really predict boom/bust cycles in the property market you’d be a billionaire by now.
This. I’ve only seen prices go up and properties being sold at higher prices than say 7-8 years ago. Switzerland is a bubble anyway. Everything you knew about housing market doesn’t really apply here.
Is there a boom? I just looked at the mortgages annual stats published by Swiss National Bank. Since 2002, the loan amount only goes up regardless of the Great Recession or Covid.
If there’s a boom, something bigger than events in 2008-2009 and 2020-2021 are needed to end it. If that big thing happens, the price decline of the property may be the last of worries.
Otherwise, it looks like at any point in time, in spite of adverse conditions, there’s more buyers than sellers.
