13 years… That’s the number of years it took to observe the reversal of a trend.
Indeed, access to property has become more expensive than renting again, on the basis of a similar accommodation.
However, the financial crisis at the end of 2008 announced low mortgage interest rates. It was natural to understand that the financial burdens of an owned unit were lower than those of a similar rented unit.
Nevertheless, according to Credit Suisse sources, history shows the recurrence of premium payments for home ownership. It averaged 29% between 1993 and 2008.
But then, why is buying a property in Switzerland becoming more expensive than renting?
Read the rest of our article to get all the information and understand this phenomenon.
Buy; Rent
Apartment and homeowners faced some startling news in the first quarter of 2022.
They paid a premium of 3.1% for their owned home. In contrast, the previous year they had a discount of 15.5%. Shocker!
What are the reasons?
First of all, there has been a massive increase in the 5-year fixed mortgage rate. To be more precise, the rate rose to almost 2% at the end of the first quarter. When we know that it was at 1.1% at the beginning of the year 2021. Atmosphere…
In addition, prices have followed this movement. The combined effect of these two components reflects the discounting of property in the form of a premium.
Translated with www.DeepL.com/Translator (free version)
However, if you decide to choose a mortgage SARON, you will continue to receive a property discount.
Interest rates on the rise
In the near future, the interest rates for fixed mortgages will continue to grow.
Credit Suisse tells us their forecast. “The next 12 months will see a further but moderate increase. The average interest rate will exceed that of the previous quarter.
It is easy to understand why buy a property in Switzerland becomes more expensive than renting.
The addition of extra loads
If you are a homeowner, we advise you to consider additional charges.
First of all, maintenance should be considered as 1% of the real estate value. Consequence?
The costs of home ownership correspond to 9078 CHF.
But that’s not all:
- Tax elements (rental value and deduction of interest liabilities).
- Illiquidity.
- The revaluation of the land in the long term…
The brand with the two sails mentions that with these stated factors, the total costs of home ownership evolve to 23 128 CHF.
Soaring construction prices
Construction sector prices are soaring due to the possible shortage of energy resources and the war in Ukraine.
The price of industrial metals such as reinforcing steel and aluminum have exploded by +136% and +74% respectively compared to 2019. Inflation is not left behind with +2.5% since April 2021.
The situation is likely to become critical as rising prices and construction times tend to have a strong impact on project owners.
Participatory real estate investment
Faced with these uncertainties and multiple financial fluctuations, SIPA Crowd Immo offers you a unique model, based on the profitability of your investments.
Did you know that real estate differs from stocks and bonds in its ability to secure your financing? It is an innovative, diversifying and adaptable asset.
The proof is that you receive and benefit from high, stable and attractive returns, between 5% and 7% net per year.
To do this:
- We simplify your administrative procedures.
- You become a shareholder of the company we create when you buy your property.
- You own a fraction of each apartment in the building in which you have invested. The rental risk is thus reduced.
- You receive your dividends once a year, in proportion to your investment.
This is a turnkey offer, combined with personalized follow-up by our experienced brokers.
New property buyers must expect that renting will continue to be more advantageous.
Therefore, it seems appropriate to look at investment alternatives in order to adapt to the new economic and financial challenges we will have to face.
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