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Old 24.10.2016, 01:22
meloncollie meloncollie is offline
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Re: Is Zurich experiencing a housing bubble?

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Bubble or not, home owners with mortgages will end with a good positive balance on their homes after 30 or so years.

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Depends on the location, and even in hot locations depends on the house.

We live in one of those hot areas. Gorgeous views of the lake and mountains, second lowest taxes in all of Switzerland. Bought the house 13 years ago for a reasonable price, poured some 40percent of the purchase price into renovating the house. But it remains a small normal house, built for the way normal folk live.

In the intervening years the price of build-able land and existing homes in this village have hit the stratosphere.

But... we will be lucky to sell the house for around what we paid for it all those years ago. No profit, if you count the cost of renovations, a loss.

What happened?

The area has changed from a sleepy farming community (which is what attracted us) to an expensive Zürich suburb. Newcomers are gazillionaires who want villas. Gazillionaires do not want normal houses built for the way normal folk live.

Homes on the scale of ours that can be razed and replaced with a villa sell for eye watering prices. But our Quartier has a Gestaltungsplan, our homes may not be changed, enlarged, or torn down and rebuilt. So of no interest to the gazillionaires.

Normal folk, the kind of families who would want a home like ours, rarely move into our village anymore.

So we have a white elephant, a home that no longer fits what buyers in this village want and thus will be hard to sell.

(No pity party here, though. The mortgage is pennies, we have saved a fortune over renting.)

So.... polish that crystal ball, and caveat emptor, caveat venditor.
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