Why home owner-effective life as a tenant

Living in one's own home remains cheaper than renting a home. To this simple denominator of the Situation on the Swiss housing market collapse. The environment for residential property continues to be friendly, including the low interest rate environment. The European Central Bank has decided that interest rates at the earliest in 2020 to raise. The decision prevents the interest rate structure in the Swiss mortgage market in the current year in motion. The price trend shows only a moderate increase, which is likely to change until the end of the year little.

The mortgage interest costs alone will not be half as high as the rent, writes the major Bank Credit Suisse, in their study, "the Swiss real estate market in 2019". Your computing example, on the Basis of the advertised property-and rental rates for a 4.5-room apartment. With a fixed-rate mortgage of five years term and 80% debt financing it is calculated annual interest cost of 7'862 franc. For a comparable apartment a year rent to be paid from 22'to 300 Swiss francs – and thus almost three times more.

full cost accounting discount

to make the comparison more realistic, the cost of maintenance of 1% of the property value to the interest to add up costs. As the living costs increase in condominium on 15'362 francs, which is still almost a third below a year's rent.

Even in full-costing the home owner more than the tenant. It involves opportunity cost in the Form of alternative investments for the equity and the risk that the object can not be sold quickly or too much money binds. Including these factors, home ownership is more expensive, and in the above example, 18'300 Swiss francs per year. This means that There is a discount of 18% compared to the cost of renting still remains. In the last fifteen years, renting was only from 2006 to 2008, cheaper than in your own home.

The regional differences in the prices of single family homes and condos are considerably. The further away the property from the city, the more affordable it is. In the centres and Central regions, average income is not enough to acquire residential property. The observed CS-study in 63 of the 106 regions. How big can be the gap of the price is illustrated in the graphic to the prices of condos along the A1, in a Radius of 5 km. A little distance can pay off. More expensive than Renting residential property in tourism areas such as the Engadine and Parts of the Bernese Oberland.

Are not home-seekers willing to make in terms of the standard of construction and living space compromise, this remains without effect on the portability. Because relating to financing have increased, the requirements of the lender. Despite low interest rates, some home equity plans fail the affordability criteria, to the banks and other financiers in the mortgage lending make. Because of the regulatory hurdles and because of the decline in construction activity in the Segment of residential property, in contrast, the rental market is ticking – expected CS also that the home ownership rate in the current year, for the first time in a long time to fall. Because the number of building permits are down, could this Trend in the next one to two years. Currently, about 39% of the population live in their own home.

price increase for a maximum of 2%

After single-family homes had risen significantly in January, declined the offer prices in February, according to the Swiss Real Estate Offer Index. The latest survey from ImmoScout 24 and the real estate consulting firm Iazi also observed slightly decreasing offer prices for condominiums. The Switzerland-wide average cost of a square meter of net living space in a family house, therefore, around 6'316 Swiss francs, or 7'142 francs in the condominium. The development adds, according to Iazi in the sideways trend of the real estate market.

For the full year, Credit Suisse assumes, however, that the moderate price growth will continue, albeit at a slower pace than 2018. She estimates the price increase to "not more than 2%", where single family homes are likely to be more expensive than condos.

Credit Suisse rates the price development of aggressive as a competitor UBS. This is expected for single family homes in a price rise of 1%, while the flats could reduce the cost in the current year, not easily fade. Basically, the Bank sees the property market as a "consensus" market, where the price donors notions of credit, buyers and sellers, as well as Evaluators are about the same. According to the UBS calculated Bubble Index has left the risk area.

For slightly higher prices speaks to the continued low mortgage interest rates as the main drivers of the steadily declining construction activity in the Segment of residential property. According to the CS-study have been created in 2018 compared to the previous year, a good 5% less condos. As measured by the inventory, this still corresponds to an expansion of 1.9%. In contrast, the access to single-family homes is approximately at the level of the previous year remained, which corresponds to relative to the existence of a weak expansion of just 0.5%.

The market seems able to absorb the offer. A view of the insertion period shows even a small acceleration. In the third quarter of 2018, the time between the publication of the offer and the sale of the property fell below the long-term average. (Financial and economic)

Created: 12.03.2019, 17:10 PM