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  #41  
Old 20.08.2011, 22:16
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Re: Experts predict the housing bubble is about to burst

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A friend of ours works for a reputable, international real estate company. She recently evaluated an apartment (120 Sq mtrs), in a newly constructed complex (2009) close to the Nyon area. Based on the current market price, the increase was 33% in just about 2 years. Would you call this a bubble or is it that the prices in canton Vaud are increasing rapidly?
You have not actually sold, a valuation is just an opinion, not fact.
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  #42  
Old 20.08.2011, 22:30
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Re: Experts predict the housing bubble is about to burst

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You have not actually sold, a valuation is just an opinion, not fact.
The place is not ours. Your point is valid. So, how does one interpret this - its just a valuation but it may not get this price at all? How realistic are such valuations? I am just trying to reconcile that on the one side the Swiss properties are not expected to appreciate beyond 4-8% and on the other,these properties in the La Cote area are valued at 33% more in just two years.
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  #43  
Old 20.08.2011, 22:40
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Re: Experts predict the housing bubble is about to burst

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The place is not ours. Your point is valid. So, how does one interpret this - its just a valuation but it may not get this price at all? How realistic are such valuations? I am just trying to reconcile that on the one side the Swiss properties are not expected to appreciate beyond 4-8% and on the other,these properties in the La Cote area are valued at 33% more in just two years.
What was the reason for the valuation? There was zero chance that the property will be sold , so it's just dinner party talk.

There was a house that had been on the market for 3 years, I bid 30% under, I was turned down, it was the 1st & only offer in 3 years. 6 months later the owner went bankrupt, the property later sold at auction for below my offer.
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  #44  
Old 20.08.2011, 22:53
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Re: Experts predict the housing bubble is about to burst

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They are priced the same & don't sell, I was looking for 4 years, most of the houses I saw at the beginning were still for sale after 4 years.
Ive also noticed this in Vaud
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  #45  
Old 20.08.2011, 22:59
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Re: Experts predict the housing bubble is about to burst

For a comparison in the UK the average for sale price is £231,543, the average sold price is £161,479.

Mortgage approvals peaked October 06 with 129,000, June 2011 figures 48,421. Demand has fallen over 60% prices will follow.
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  #46  
Old 21.08.2011, 00:09
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Re: Experts predict the housing bubble is about to burst

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A friend of ours works for a reputable, international real estate company. She recently evaluated an apartment (120 Sq mtrs), in a newly constructed complex (2009) close to the Nyon area. Based on the current market price, the increase was 33% in just about 2 years. Would you call this a bubble or is it that the prices in canton Vaud are increasing rapidly?
When 1000s of properties are actually being sold at 33% above what the owners paid for them 2 years before - then its a bubble.

But, as already pointed out, this is not the situation, is it? It's one estimated worth of one untried property...
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  #47  
Old 21.08.2011, 01:17
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Re: Experts predict the housing bubble is about to burst

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When 1000s of properties are actually being sold at 33% above what the owners paid for them 2 years before - then its a bubble.

But, as already pointed out, this is not the situation, is it? It's one estimated worth of one untried property...
Not really, that's just the start on the enthusiasm stage, the bubble is several years later
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Old 21.08.2011, 09:03
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Re: Experts predict the housing bubble is about to burst

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Not really, that's just the start on the enthusiasm stage, the bubble is several years later
It should be remembered that should a seller actually achieve a 33% increase in value in 3 years, something in the region of 40% (varies by Canton and length of occupancy) of this profit will be taxed as Grundstuckgeweinsteuer. This will be a damper on enthusiasm...
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  #49  
Old 21.08.2011, 13:06
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Re: Experts predict the housing bubble is about to burst

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I just sold my house in the last 36 hours and a real estate developer acquaintance advised my strongly against it as he said that loans would get even cheaper and drive prices higher.

I ignored him as another 9 months (which we could have waited) of growth at Swiss market pace is say 3-4%, whereas any further tightening of the economies in Europe and loss of bank confidence COULD lead to a slow down in the availability of funding (anybody think that the Swiss bank don't have further bad debt news hidden somewhere?)

Anyway....we sold as a bird in the hand etc etc....
About "loss of bank confidence COULD lead to a slow down in the availability of funding "
We are talking about the Swiss Banks who have just been forced to accept an extra 200 billion CHF by the SNB?? I do not see funding as a problem.
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Old 21.08.2011, 16:17
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Re: Experts predict the housing bubble is about to burst

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About "loss of bank confidence COULD lead to a slow down in the availability of funding "
We are talking about the Swiss Banks who have just been forced to accept an extra 200 billion CHF by the SNB?? I do not see funding as a problem.
A sharp rise on the value of the currency could easily lead to deflation, Unfortunately any loans won't shrink with any fall in prices, very low interest rates would tend to indicate deflation.

It's only very recently that 'B' permit holders could buy property, if salaries fall for ExPats which is possible, the growth in the market of the last 10? years may evaporate.
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  #51  
Old 21.08.2011, 17:37
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Re: Experts predict the housing bubble is about to burst

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A sharp rise on the value of the currency could easily lead to deflation, Unfortunately any loans won't shrink with any fall in prices, very low interest rates would tend to indicate deflation.

It's only very recently that 'B' permit holders could buy property, if salaries fall for ExPats which is possible, the growth in the market of the last 10? years may evaporate.
It does not really matter if the loans do not shrink with price falls so long as interest rates are low. The issue comes when when it is time to sell & pay off the loan or when interest rates rise.

Defensive strategies are to lock in low interest rates long term (2% or less for 10 years are possible) & to rent rather than sell (so long as you have locked in low interest rates long term & can consequently rent at a competitive price without losing money).
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  #52  
Old 21.08.2011, 17:53
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Re: Experts predict the housing bubble is about to burst

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if salaries fall for ExPats which is possible
How is this possible and what do you mean by ExPats?
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Old 21.08.2011, 19:02
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How is this possible and what do you mean by ExPats?
Foreign workers like you & me. If the euro stays week v chf , Germans & French will be running to work here for lower salaries. Several companies have cut pay for workers living in France & Germany. Companies can give notice at any time & no redundancy needs to be paid. Deflation or inflation I know which I prefer!
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  #54  
Old 21.08.2011, 19:35
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Re: Experts predict the housing bubble is about to burst

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Foreign workers like you & me. If the euro stays week v chf , Germans & French will be running to work here for lower salaries. Several companies have cut pay for workers living in France & Germany.
Yes, but remember that those living in outside of Switzerland while working inside the country as migrant workers, not expatriates.

I believe that it would be very difficult for them to discriminate between say a Swiss citizen and a B or C permit holder that lives in Switzerland and works in Switzerland. After all, we pay taxes here based on what we earn. We earn less, they get less taxes. We leave and go and live in Germany or France or where ever. It is a self defeating way of moving forwards and although it might happen a couple of times here and there, I can hardly see this becomming a trend.

Do you really think that it is possible to have a situation where you pay 25-30% of the population in your country a different rate of income because they don't have a passport? Some countries do, but it does not create a good working environment and I believe is generally unsustainable.

As well as that, then how do they descide to "up" your salary? Is it when you get a C (settlement) permit? Is it when you marry a Swiss citizen or have a Swiss child (becuase having a lesser salary would damage the Swiss person's life in this case) or would it only be when you became a citizen?

I hope you can see how badly thought out this whole thing is.
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Old 21.08.2011, 19:43
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Yes, but remember that those living in outside of Switzerland while working inside the country as migrant workers, not expatriates.

I believe that it would be very difficult for them to discriminate between say a Swiss citizen and a B or C permit holder that lives in Switzerland and works in Switzerland. After all, we pay taxes here based on what we earn. We earn less, they get less taxes. We leave and go and live in Germany or France or where ever. It is a self defeating way of moving forwards and although it might happen a couple of times here and there, I can hardly see this becomming a trend.

Do you really think that it is possible to have a situation where you pay 25-30% of the population in your country a different rate of income because they don't have a passport? Some countries do, but it does not create a good working environment and I believe is generally unsustainable.

As well as that, then how do they descide to "up" your salary? Is it when you get a C (settlement) permit? Is it when you marry a Swiss citizen or have a Swiss child (becuase having a lesser salary would damage the Swiss person's life in this case) or would it only be when you became a citizen?

I hope you can see how badly thought out this whole thing is.
They will just pay everyone less once there is a critical mass earning less. Falling cost of living will be the reason, annual pay cuts rather than rises.

Many of the jobs in CH , could be elsewhere , if it's considerably cheaper it will happen if salaries don't fall against a rising salary.
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Old 21.08.2011, 20:00
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Re: Experts predict the housing bubble is about to burst

I am not that pessimistic. I don't think that it would be an impossible scenario but I don't think that I need the stress of trying to predict or avoid that future. I still think that Switzerland is one of the best places in the world to weather the next 20 years of global change so I am sticking with it. Viva la Switzerland.
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Old 21.08.2011, 20:43
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Re: Experts predict the housing bubble is about to burst

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I am not that pessimistic. I don't think that it would be an impossible scenario but I don't think that I need the stress of trying to predict or avoid that future. I still think that Switzerland is one of the best places in the world to weather the next 20 years of global change so I am sticking with it. Viva la Switzerland.
I have been here for 17 years, when USD was worth 1.80 CHF & GBP was worth 2.6 CHF, salaries & the cost of living here was not high. It's only been like it for a short period of time, you should not assume it will always be so.
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Old 21.08.2011, 20:51
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Re: Experts predict the housing bubble is about to burst

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I have been here for 17 years, when USD was worth 1.80 CHF & GBP was worth 2.6 CHF, salaries & the cost of living here was not high. It's only been like it for a short period of time, you should not assume it will always be so.
Actually, in '94 USD was at 1.4 or so, got back up to 1.8 only in 2001 or so (but was 1.8 when I moved here in '85)

2.3 when I first came here in '82, though.

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Old 21.08.2011, 20:55
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Re: Experts predict the housing bubble is about to burst

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How is this possible and what do you mean by ExPats?
I would presume that he means those that come here under foreign contracts, working for multinational companies (something I've never done)

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Old 21.08.2011, 21:47
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Re: Experts predict the housing bubble is about to burst

My feeling regarding Switzerland and the currency is that when Euroland decided to depart from its hard currency course and to buy junk bonds from its member states, Switzerland found itself out in the cold. When the Euro started it was intended (by Germany who called the shots then) that it would be a hard currency as was the D-Mark. For political reasons this is no longer so. In the old days Switzerland had lived comfortably in the shadow of its big neighbour to the north and kept the Franc within a close exchange rate range to the D-Mark and was happy to do so. Now the CHF is the only hard currency worldwide except for the Yen maybe. The trouble is Switzerland is too small and will have and is having trouble to control its own currency. I see the possibility of troubling times for the country and its currency.
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