This curve tends to disagree:


You can't accumulate debt forever. It has been proven in the past and it is true today. The dynamics are not different, only the magnitude of them.

This can evolve quickly, depending on the economic environment. Looking at what happened in the 90's, and quoting L'Hebdo: "Durant la crise des années 90, le taux de vacance des logements à Genève avait rapidement augmenté en partant d’un niveau de pénurie sévère comme aujourd’hui. Le taux de vacance était passé de moins de 0,5% – il est actuellement de 0,22% – à 1,5% en dix-huit mois."

Yes and that is why we are buying as well, that along with giving us enough stability for our children to grow up in without having to move again.

Hence I am not concerned in the short term but more long term when demand might be greatly reduced.

Hi,

I've been watching this very interesting thread thread since some time, some comments:

- housing prices are just not sustainable in the geneva lake area. The gap between rent and purchase prices (and between purchase price and income growth) has never been higher, not even during the 89 bubble

- this is confirmed by a friend of mine who works at credit suisse. He is selling his house and turning into rental as the outlook for the 12/24 months to come is very cloudy. He's not the only one doing this, lots of people in the private banking and investment banking sector are doing the same. A recession will be unavoidable in the region and this will reduce high-level immigration as expat companies will stagnate, layoff or moving staff to cheaper locations (in particular Asia).

Maybe you are right but some of us lost our jobs here several years ago (4 in my case). I have since got all of my work from outside Switzerland but work from home 3 days a week and travel 2 days.

I know 5 other families who are chosing to do similar because their work has been relocated, they have young families and do not want to move again. However the husbands will be doing Monday to Friday commutes. I see having to travel for work becoming more and more the normal for me to be honest.

Since the 1990's there was measures taken to stop speculation, that is not to say that prices are not higher than they should be.

If I remember correctly approximately 50,000 people come to Geneva each year and 45,000 leave which leaves a surplus of 100,000 people which I am sure have not been accomodated in the local housing stock. Maybe across the border or further out.

Look at the number of people still wanting to come to Switzerland, who want to live and work here, who want to leave their country and come to Switzerland.

We are getting a ten year fixed mortgage, it is cheaper than what we pay in rent now. Honestly I do not care if it goes down in price over that time too much. We need somewhere to live and currently I cannot think of a better place to live at the moment.

This is not to say that people are not right and that there will be a correction in the housing market here, just how we see it.

sounds familiar to the situation in the UK. the early ones saw the unsustainable lending and sold to rent in 2002, only to see the market continue its crazy ascent all the way to 2008.

i'd say betting on a housing crash is a risky proposition due to:

- transaction costs to sell and buy again
- difficult to time due to transaction speed
- general move generally dependent on macro factors which may be difficult to time
- uncertain how political response might derail your plan (witness govt. attempts in the UK to prop up house prices with various stimulus and tax measures)
- you're fighting against time as a real fall in house prices will in time be masked by devaluing currency so that the nominal price of the house might rise even if in inflation adjust terms the value has fallen

it's also worth noting that the rent/price ratio can correct through increasing wages. given the recent SNB actions, i fully expect inflation in the medium term to lead to higher rents even if the rent controls might slow the pace of rent increases.

Hi Odile, what would you call a reasonable price for a standard-issue house (old enough for remodeling but still habitable) somewhere along the train lines:
- S2 La Sarraz - Croy-Romainmôtier and
- S1 Chavornay - Ependes

I am really NO expert and don't know that area very well - as usual the nearer to a commutable station the more expensive. I'd say about 750.000 but if a bit further away you can still get great houses for around 500.

He' not betting on anything. He just feels that his job is not safe anylonger, and there is no "work from home" solution for an unemployed banker.

Actually, only few people can work from home and these are the first to be laid off if things don't go well...

If I had the possibility to work from home, I'd look elsewhere in CH to settle down. There are lots of places with nice views & quality of living much cheaper than geneva lake - Yverdon, Bienne, etc..

so everyone will sell their houses and rent...which will push the rental prices up....so everyone will buy again?

Some people in this forum seem to think that prices have only one direction: UP!! Whatever is happening to Euro and global economy etc..

Are these undercover real estate agents? Or is it that living in Switzerland makes one dull?

No they are house owners with lots of hope

very few people have said that actually.

a lot have said they have bought their home to live in and not too fussed if it drops slightly

my opinion is they will stay the same or go up very slightly if you have a house in the right location.

it is silly to say all the houses in the lake leman region will go up or all qill go down. the good houses in the right locations will always keep their value.

The trend is always up. They may, and do go down. But then they go up again.

Buying in Switzerland for a short-term profit has never been a good idea and is discouraged with various mechanisms.

To me, buying long term, and on a monthly basis, paying less in mortgage payments than rent makes sense.

If we lose 30% of the value of our place and have to sell, we're still, because of the gains already made, still in profit.


But then we're not in Geneva.

Yet another thread speculating on housing that will lead to no conclusions

Prices will go up and down and again depending on who you are you will have certain biases to which directions this is going. The fact of the matter is, nobody knows and if anyone did then you wouldn't see all these differences in opinions.

If you can afford to own a house, I say good luck to you and I hope that you don't experience the pain experienced in other parts of the world.

If you can't afford to buy why bother? Keep renting and enjoy the show

What makes you think a 30% fall is all that could happen, markets always overshoot fair value in both directions ,60% is quite possible which has happened in some US Cities & Ireland

Lots of EF members have been in the region for a lot of time, bought several years ago when prices were reasonable, they have maybe rock solid jobs (and lots of time for postings on the EF) and are now looking down to undecided newcomers like cats from the heights of a secure roof. They already made up their gains.

For somebody like me, who was about to buy, I'm at the bottom of the pyramid and have all risks to take.

If I lose my job over the say next 12-36 months during this economic downturn which we won't escape:

1. I (obviously) lose my income

2. I don't speak fluent french (well, writing is even worse ) nor any german. I join many others in the same situation, so the job market will be difficult for me - I would probably have to quit the region

3. The housing market will be under pressure in the Arc Lemanique so even without a bubble burst, buyers will start to negotiate and a price reduction of 10-15% will be very likely (like it was the case in 2008 btw). Add to that the 5% notary fees which you'd lose anyway. In summary, your savings you had put into the 20% "fonds propres" are down the drain to 75%.

Pretty risky plan, but for the aforementioned cats on the roof it's a nice spectacle to watch (shuddering like in the movies) ..

lose.........not loose.

the problem you have now gva is that if

a) your right , you will be losing your job and house prices will crash and bad for everyone
b) your wrong, house prices continue to go up or stay the same and you will have to pay higher rent etc

so lose/lose situation? whats your plan?