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Old 24.10.2016, 12:34
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Treverus Treverus is offline
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Re: Is Zurich experiencing a housing bubble?

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High End London prices are off 25% over the last 18 months, thats in addition to a 20% fall in the value of the . When prices are in a bubble they fall a long long way. London prices are currently about 12 times salaries, even if they fell to 6 times they would not be a bargain. In the 1990's property dip, London sold for less than 3 times salaries thats a drop of over 75% from todays prices.

A geared investment is always very dangerous with a 20% deposit your investing 500% of your money in a single asset. Don't put all your eggs in 1 basket is thought prudent although ignored by people buying a home.
Erm, yes, but we all know that there are some key differences:
- The London property market actively sells to high net worth individuals around the globe. When I was living the Singapore were there TV ads with as-British-English-as-technically-possible voice overs recommending buying UK property... These rich Russians, Arabs, Africans and so on buy a london flat as an investment... not to live in it.
- a market with a lot of investment flats will always be way more volatile as one where people actually buy to live in themselves. This is both good and bad... on the one hand do you not have the volatile movements as much here... but on the other hand is selling property typically a much more complicated and time consuming matter than some expats thought...
- the business case of renting vs. buying simply adds up if you know you are going to stay somehwere for the long term. I personally don't know where I will live in 5 years, so then is it a totally different story...

P.S: I do not think Switzerland in general and Zurich in particular is a bubble. As long as incomes are as high as they are, tax as low as it is and the rental market as healthy as it is... is a property in a decent location a good long time investment. If you can only afford it as your ONLY investment is it probably not for you though...
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