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  #41  
Old 07.01.2011, 09:10
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Re: Explanation for the Swiss Housing System?

It does amaze me when people go on about how expensive houses are here, there are cheap houses out there, even in canton zurich, and if your prepared to do some renovations yourself then there are some really cheap houses out there. look in some cantons boardering zurich and you'll find loads of 'cheap' houses.

Where do people come from where they think a 500k chf house 20 mins from the centre of zurich is expensive? just take a look at the cost of a house 20 mins from the centre of london.
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  #42  
Old 07.01.2011, 09:18
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Re: Explanation for the Swiss Housing System?

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I have to agree. It starts with the differences in the building code and just gets better from there.

I assume, this is also to meet energy-saving requirements.
Short of the active ventilation with heat recovery, I think you are not allowed to build a house anymore below the minergie-standard (though you don't have to certify, if you don't want to).
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  #43  
Old 07.01.2011, 09:52
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Re: Explanation for the Swiss Housing System?

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If you want to buy a house in Switzerland, prices are starting in the 1 million CHF range and upwards.
Not in my neck of the woods. 250K can get you something nice.

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So banks accommodate this by allowing you to split homeloans into 2 parts, and leaving the larger part to never be paid back, ie: you can just keep paying interest on it forever. That's pretty much unheard of in the rest of the world, but seems something unique to Switzerland in order to allow average families to buy a house that they otherwise couldn't afford.
I understand from my Dutch colleague that this is also common in the Netherlands.

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Why is that?
The Swiss do not like paying wealth tax. If you don't own it, you don't pay tax on it .
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  #44  
Old 07.01.2011, 09:55
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Re: Explanation for the Swiss Housing System?

You can buy, or build, a sizeable detached house for a lot less than 1 million, depending on the location. In some of the villages not 20 minutes from Fribourg, you're looking at 500k - 750k on average.
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  #45  
Old 07.01.2011, 11:11
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Re: Explanation for the Swiss Housing System?

I sometimes think the Swiss (and non-Swiss) fear things that are, objectively, a non-issue. Wealth tax? We're talking literally a few hundred CHF per year on a house. Tax on the Eigenmietwert? Again, the equivalent of 300 - 700 per month on an average house, partially deferred by your mortgage payments of course, but hardly a convincing argument not to consider partially amortizing directly (assuming you still retain the degree of liquidity you need to be able to relocate in needed).

There are also many sound reasons to follow the indirect amortization plan, but I don't think the banks are promoting it out of the goodness of their heart for the benefit of the consumer. It's easy money and they get it twice (constant interest payments plus the flow into the 3a that they pay a pittance on).
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  #46  
Old 07.01.2011, 11:33
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Re: Explanation for the Swiss Housing System?

It should be born in mind that moves are afoot, albeit slowly, to abolish the 'Imputed rental value charge' (Eigenmietwert) together with the deduction of mortgage interest and property maintenance (currently at 20% of the amount of Eigenmietwert in Canton Zurich).

Quite what effect this will have is unclear - or even if it will be adopted. Presently you can offset mortgage interest against your tax liability without limit on as many properties as you want. Clearly some high-earners will be changing their property portfolio with this change in mind. But for the single home owner, this change will be neutral to positive depending on the size of mortgage, interest rate paid and amount of Eigenmietwert.

But if adopted, it will mean paying off a mortgage, especially if interest rates rise steeply is a more attractive proposition here. In the UK mortgage interest deductions were once capped at £30,000 pa (that's the mortgage value, not the interest) and have long since been abolished altogether...
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  #47  
Old 07.01.2011, 13:09
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Re: Explanation for the Swiss Housing System?

Thanks guys, yes, I have access to HomeGate too Obviously theres houses in the 500-900k range, but there's plenty in the 1 Mill range too that are really nothing spectaular, for ex. a 850k house in Schalunen, 20-30 min outside Bern:

http://www.immoscout24.ch/IS24Web/_V...003331&index=5

Put that house in any other country, ouside of a major city and no way would it sell for that price.

For the sub-1 Million stuff, yes, I looked long and hard, my max is actually only 600-700k and I couldn't find anything that said "yes" to me in that range. There were a few "maybes" but I thought about it, and dropping close to a million on a "maybe" didn't feel right and I passed on it. Alot of these also looked good in the advertisement, but when I went to see it in person, it was next to a garbage dump or a brothel, or on a steep slope with no yard, etc...

Anyway, my main point was that the system here makes owning unattractive compared to renting, and that the ones who do own their homes, basically never pay off the loan. And this system goes contrary to most of the rest of the civilized world.

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And, quite importantly, have to be able to hold off a roaring fire on the other side for at least 30 minutes. At least in new houses that's the case.
...and yet I can (literally) hear my upstars neighbor fart, sneeze and pee in my "high quality, Swiss-built" apartment...
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  #48  
Old 07.01.2011, 13:39
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Re: Explanation for the Swiss Housing System?

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Thanks guys, yes, I have access to HomeGate too Obviously theres houses in the 500-900k range, but there's plenty in the 1 Mill range too<snip>
What you have to realise (as mentioned on here before) is that there is not a housing market in Switzerland, as understood in most free economies. The demand is high and supply is short - and many homes sell without being advertised simply be word of mouth. Often what you see on Homegate.ch are the ones that are slow to sell.

If a property is advertised there for more than a couple of weeks, I'd say it was over-priced or there were some other problems with it. Homegate charge per day and advertisers can remove their ads within an hour or two so there's no other reason for a property to remain there for a long time.

Homegate update their listings (or did check their site for the latest info) at 6am midday and 6pm. So you can see if any new properties come on the market then. But better still register with homegate and get them to email details of new ads to your specification as soon as they are published...
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  #49  
Old 07.01.2011, 14:07
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Re: Explanation for the Swiss Housing System?

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And, quite importantly, have to be able to hold off a roaring fire on the other side for at least 30 minutes. At least in new houses that's the case.
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...and yet I can (literally) hear my upstars neighbor fart, sneeze and pee in my "high quality, Swiss-built" apartment...
If your house is new, i.e., built in the last ten years, this would be quite unusual. Or you live somewhere really cheap, I've only been in one "modern" place that was not very noise-proof and that was a development that was intentionally built at a lower cost to offer affordable housing to families.

Last edited by Kittster; 07.01.2011 at 15:46. Reason: Spelling errors...
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  #50  
Old 07.01.2011, 15:41
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Re: Explanation for the Swiss Housing System?

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Where do people come from where they think a 500k chf house 20 mins from the centre of zurich is expensive? just take a look at the cost of a house 20 mins from the centre of london.
Apparently Long Island....


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Put that house in any other country, ouside of a major city and no way would it sell for that price.
That's completely irrelevant. The house is here in this market.

How long are you planning to be here? It doesn't sound like you'll be here long. So it's probably not the best idea to buy.

Last edited by miniMia; 07.01.2011 at 15:52.
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  #51  
Old 07.01.2011, 15:51
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Re: Explanation for the Swiss Housing System?

Property ownership is excellent, I believe it performs better than the pillar 2 PF I have.

If you buy right and sell right, you'll make a nice profit (don't rush too much or you'll get taxed rotten).

We now own two places; one to rent out in a postcode snobbery area and one we bought for 75% of market value because the sellers were slightly, erm, how do I put it.....dumb. Their idea of a quick sale was to not list the place on the open market

My repayments and NK on two properties is less than the rent I was paying on a 4.5 room apartment (which was my last rental). That includes amortisation.
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  #52  
Old 07.01.2011, 19:23
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Re: Explanation for the Swiss Housing System?

To the chourus of the "houses are affordable in Switzerland" people, I ask then, why is home ownership so low here in contrast to the rest of the world?
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  #53  
Old 07.01.2011, 19:38
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Re: Explanation for the Swiss Housing System?

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I have to agree. It starts with the differences in the building code and just gets better from there. Every time my family visits, they can't stop opening and closing doors, playing with windows, tapping on walls etc. I think the original post wasn't saying that wood construction was the problem, but rather the quality of wood construction in Canada and the US. Much as I would like to say my fellow Canadians can build a good house, it's all about show rather than function. I'm sure they won't fall down, but it's the detail work that lets them down. Go to a construction site in Canada and check the quality of framing. It's pressure-treated 2x4s, 2x6s and 2x10s (which are not the nominal dimensions), nail-gunned together. Now check a wood-framed house in CH. Solid, dried, laminated beams, massive cross section, through-bolted. Our outer walls have a 35 cm cross section and are truly an engineered structure. Nothing in modern Canadian construction comes close to it. Doors here weigh about twice as much, swing on complex hinges, are 360° gasket-sealed and are shut with a latch of watchmaker's precision. Windows are inert-gas-filled, rubber-gasketed, multi-articulating marvels. "Modern" windows in Canada may meet the R-Whatever norm, but they look like they were made in China from photo-copied plans. Roofing in Canada is asphalt shingles nail-gunned to plywood. Here it's kiln-fired tiles which fit together perfectly like a 3D puzzle. I could go on and on. My engineering eye tells me that every apartment and house here is just built to a completely different standard. Now, you could spec similar equipment in Canada, and then your house build would be over 1 million.

For comparison, 30 minutes outside Toronto (without a rapid transit connection), plywood-and-drywall new builds or 1960s wood-frame houses on 50'x125' lots are selling in the 500'000 - 600'000 CAD range, and you can literally blow a candle out on the drafts through the wall seams and windows. Traditional 1300 square foot brick row houses near the University of Toronto are over a million.
Wow...you really know your stuff, quite impressive. I am not an engineer as you are but I always noticed the quality of construction in Switzerland. I remember in the USA I went to look at a condominium. They wanted at least a million for it. Within myself I was chuckling that they would think this monstrosity was even worth that much. I could find an apartment in Kreis 4 that would knock-the-socks off that condominium...easily...The floors were "fake wood" and the construction looked cheap. They have homes they call "McMansions"(in USA)...they are like fast-food. They throw them up quick and sell them for a fortune.
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  #54  
Old 07.01.2011, 19:44
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Re: Explanation for the Swiss Housing System?

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To the chourus of the "houses are affordable in Switzerland" people, I ask then, why is home ownership so low here in contrast to the rest of the world?
Because people do not want to be inflexible and there's a good pension system.
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  #55  
Old 07.01.2011, 19:45
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Re: Explanation for the Swiss Housing System?

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To the chourus of the "houses are affordable in Switzerland" people, I ask then, why is home ownership so low here in contrast to the rest of the world?
What's so hard to understand?

There is little perceived value in owning due to difference in taxes here, though value can be found particularly with the current mortgage rates. Probably the number of Swiss who go abroad for a time and the number of foreigners who are here temporarily, both rather high percentages, play into the low rate; ownership only makes sense in the long term in most non-bubble markets.

Demand is high, supply is low. Prices are high, but not unreasonably so - it's what the market will bear. I, for example, can easily afford a decent place as a single man at the age of 31, and I'm far from the most successful person in this country. It may be that you're not making that much compared to your home country, and therefore the prices seem high to you, but given the higher wages here, that's not the case for a lot of us; we just don't all see a big benefit to owning.
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Old 07.01.2011, 19:52
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Re: Explanation for the Swiss Housing System?

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To the chourus of the "houses are affordable in Switzerland" people, I ask then, why is home ownership so low here in contrast to the rest of the world?
1. Many Swiss are happy to live in rented apartments and have the landlord take care of anything broken.

2. Many Swiss buy apartments because it works out to be cheaper if you can pay 20% on the initial sales price and get a mortgage on the rest. Apartments aren't as big as houses and the Swiss enjoy going away on vacation so they are easier to take care of.

3. Houses are harder to come by, even for the Swiss, and many don't want to move away from their town just to buy a piece of property.

4. Property is hard to come by due to zoning laws.

5. Building Swiss houses used to be more expensive a few years ago but prices have come down due to high tech, imports and lesser quality.
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  #57  
Old 07.01.2011, 20:57
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Re: Explanation for the Swiss Housing System?

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I remember in the USA I went to look at a condominium. They wanted at least a million for it. Within myself I was chuckling that they would think this monstrosity was even worth that much. I could find an apartment in Kreis 4 that would knock-the-socks off that condominium...easily...The floors were "fake wood" and the construction looked cheap. They have homes they call "McMansions"(in USA)...they are like fast-food. They throw them up quick and sell them for a fortune.
This is not happening any more. The quick building and selling of McMansions ended in 2008. I am currently sitting in my McMansion (which we're renting and yet still American! Imagine that!). The value for the owner decreased substantially in the past 3 years, but he had the bad luck of buying in 2006 at the very top of the bubble. Others in our neighborhood have lived here since the houses were built 20 years ago, and no, their houses aren't falling apart and are in fact quite beautiful.

To understand a housing market, you have to always look at what the finance guys are coming up with to enrich themselves, such as our infamous and ridiculous subprime mortgages, which ended in a big ball of fire. Can everyone be sure that Switzerland isn't in a bubble, what with the very low interest rates I keep hearing about? House prices there did decline for about a decade in the 80's (can't remember the exact dates). There is no guarantee that it won't happen again, whenever interest rates increase.
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Old 07.01.2011, 21:15
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Re: Explanation for the Swiss Housing System?

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Can everyone be sure that Switzerland isn't in a bubble, what with the very low interest rates I keep hearing about? House prices there did decline for about a decade in the 80's (can't remember the exact dates). There is no guarantee that it won't happen again, whenever interest rates increase.
You never know, but I doubt any "bubble" will ever happen here like in the US. However, considering the high costs here, even a "small" 10% drop in price on a 1 Million CHF home will have a much bigger bottom-line loss than a 10% drop in say a 300k home.
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Old 07.01.2011, 21:31
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Re: Explanation for the Swiss Housing System?

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You never know, but I doubt any "bubble" will ever happen here like in the US. However, considering the high costs here, even a "small" 10% drop in price on a 1 Million CHF home will have a much bigger bottom-line loss than a 10% drop in say a 300k home.
There already WAS a big bubble in Switzerland in the 80s. Many people are only now going into profit. This bubble is what made the banks enforce a 20% or more down payment. It's a big joke that they then went against their own better judgement and got into the market in the US. They really should have known better.
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Old 07.01.2011, 22:36
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Re: Explanation for the Swiss Housing System?

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This is not happening any more. The quick building and selling of McMansions ended in 2008. I am currently sitting in my McMansion (which we're renting and yet still American! Imagine that!). The value for the owner decreased substantially in the past 3 years, but he had the bad luck of buying in 2006 at the very top of the bubble. Others in our neighborhood have lived here since the houses were built 20 years ago, and no, their houses aren't falling apart and are in fact quite beautiful.

To understand a housing market, you have to always look at what the finance guys are coming up with to enrich themselves, such as our infamous and ridiculous subprime mortgages, which ended in a big ball of fire. Can everyone be sure that Switzerland isn't in a bubble, what with the very low interest rates I keep hearing about? House prices there did decline for about a decade in the 80's (can't remember the exact dates). There is no guarantee that it won't happen again, whenever interest rates increase.
Gotcha...but I don't think anyplace will be as bad off as USA. I am in the USA temporarily working on an assignment till next year (my main residence is in Switzerland) and the building here is not up-to-standard. Sorry...Even so called "luxury homes" are not up to standard with some of the best apartments in Switzerland. Unless you want to pay 12 million for a home in USA I wouldn't invest in the market. Plus owning a home shouldn't been seen largely as an investment, you buy because you love it and want to live there. Switzerland has been able to avoid a lot of the pitfalls because the people are more reasonable and won't try and buy a home while working on a wage from Burger King. The mentatility is different. Maybe you will see that once you are in Switzerland...
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