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Old 19.08.2011, 21:32
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Experts predict the housing bubble is about to burst

There was an article in our local paper recently about how demand for housing will peak in a few areas in Kt. Schwyz and the housing bubble will burst. Looking at the paper today, I saw more available flats for rent than I've seen in a long time.

Has anyone else noticed a change in availablility of housing?
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Old 19.08.2011, 21:37
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Re: Experts predict the housing bubble is about to burst

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There was an article in our local paper recently about how demand for housing will peak in a few areas in Kt. Schwyz and the housing bubble will burst. Looking at the paper today, I saw more available flats for rent than I've seen in a long time.

Has anyone else noticed a change in availablility of housing?
given the small size of the swiss market, i would say that demand and supply is very local and also small changes can have a big impact so there can be a lot of 'volatility' in the demand and supply.

for example, in my area, recently an overseas employer brought 100 new families to the region. this has eaten up almost the entire stock of rental housing causing an acute shortage in Schaffhausen.

Housing is always a micro-market, but in Switzerland even more so. Ultimately, I think it will be driven mostly by the demand side is the supply is constrained and cyclical. How much building is going on in your area?

Personally, I think house prices will increase - being pumped up by the SNB's inflationary policies. If Eigenmietwert is scrapped (and maybe an increasingly aging voting population will push this change through) then prices could rise a bit.

On the flip side, you have risks of debt-deflation and global economic slowdown hitting Switzerland. Personally, I think the balance is on the inflation side, which is why I went ahead with my purchase (together with local factors).
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Old 19.08.2011, 21:53
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Re: Experts predict the housing bubble is about to burst

What he said, what I'm told, though I am also told that in Switzerland real estate prices can be very specific and the only proof of the pudding is when you go to sell. So when you go to buy, buy specifically on what fulfills your needs and price range and don't speculate too much on the sale value.
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Old 19.08.2011, 22:20
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Re: Experts predict the housing bubble is about to burst

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There was an article in our local paper recently about how demand for housing will peak in a few areas in Kt. Schwyz and the housing bubble will burst. Looking at the paper today, I saw more available flats for rent than I've seen in a long time.

Has anyone else noticed a change in availablility of housing?
You have to take everything these experts say with a pinch of salt, if they had any idea at all they would be hugely rich & would not bother writing articles.
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Old 19.08.2011, 22:21
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Re: Experts predict the housing bubble is about to burst

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What he said, what I'm told, though I am also told that in Switzerland real estate prices can be very specific and the only proof of the pudding is when you go to sell. So when you go to buy, buy specifically on what fulfills your needs and price range and don't speculate too much on the sale value.
absolutely, the market is so illiquid you can't even bank on selling it, let alone for a profit.

of course, you only need one idiot to pay to get rid of it, but if you've bought, then you are that idiot for the time being.
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Old 19.08.2011, 22:33
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Re: Experts predict the housing bubble is about to burst

The rental advertisements are definitely seasonal - lots of people leaving and arriving over summer, and people who are starting to list for the next 'official moving date' - that's just my observation as someone who was looking regularly at apartments from August 2008 - August 2010...and more recently for two colleagues...

Next official moving date is 1 October in Zurich - anyone who has to give 3 months notice would have put their apartment on the advertising list from 1 July...so expect the advertisements to peak about 6 weeks before that date - ie. mid August....
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Old 19.08.2011, 22:41
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Re: Experts predict the housing bubble is about to burst

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You have to take everything these experts say with a pinch of salt, if they had any idea at all they would be hugely rich & would not bother writing articles.
...you might also add that "experts" that write articles may not be so innocent of nudging and manipulating the market.
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Old 20.08.2011, 00:07
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Re: Experts predict the housing bubble is about to burst

Up until say 6 months ago you could sell a decrepit cow shed in Ausserschwyz for a couple of millions.

(Well, you couldn't actually sell the shed because it falls under the BGBB, but nonetheless there were developers falling all over themselves trying to buy it under the table, at any price...)

In the last month or so, however, I've noticed a change; immo agents are - prepare yourself for a shock - starting to return calls!

Clearly a sign the market is changing...

Last edited by meloncollie; 20.08.2011 at 00:23.
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Old 20.08.2011, 00:27
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Re: Experts predict the housing bubble is about to burst

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...you might also add that "experts" that write articles may not be so innocent of nudging and manipulating the market.
But there always wrong with timing, if the keep saying there will be a crash next week eventually they will get it right.
The only people that got it right more times than not have been the fabulously rich partners at Goldman Sachs.
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Old 20.08.2011, 00:31
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Re: Experts predict the housing bubble is about to burst

What bubble??
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Old 20.08.2011, 00:35
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Re: Experts predict the housing bubble is about to burst

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What bubble??
If you look at CH house prices in USD or GBP terms it's a bubble waiting to burst.
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Old 20.08.2011, 00:41
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Re: Experts predict the housing bubble is about to burst

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If you look at CH house prices in USD or GBP terms it's a bubble waiting to burst.
Yes and euros, but why would one do that? Swiss property is is traded in CHFs. There has been high demand and modest growth for the last 30 years, but no sudden bubble, except perhaps in the early 1990s the start of a bubble was soon defated with the introduction of capital gains tax on the sale on all property (Grundstuckgewinsteuer)...
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Old 20.08.2011, 00:43
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Re: Experts predict the housing bubble is about to burst

As I understand becuase only Swiss citizens or EU citizens (with certain Swiss residence permits) can buy land here, that has got to protect the market somewhat from the point of view of puchase prices along with the significant capital gains taxes on property transactions.

I am think the rental market is very micro and quite mobile.
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Old 20.08.2011, 00:58
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Re: Experts predict the housing bubble is about to burst

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Yes and euros, but why would one do that? Swiss property is is traded in CHFs. There has been high demand and modest growth for the last 30 years, but no sudden bubble, except perhaps in the early 1990s the start of a bubble was soon defated with the introduction of capital gains tax on the sale on all property (Grundstuckgewinsteuer)...
It's not a very Swiss thing to buy ones own house, if they do, they buy one house in their life & dont expect to sell it. The US / UK people who bought several years ago would not be able to afford the same house today. (2 people have said so recently). Due to the tax situation the downside is higher than the upside IMHO.

London house prices are being supported because of the weak pound. I was aware of 3 very expensive projects in Verbier 3 years ago, 1 which had been started has been finished, the others have not yet started. Most of those were sold to people who aquired B permits as they were too big to sell to foreigners.
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Old 20.08.2011, 01:24
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Re: Experts predict the housing bubble is about to burst

yes i have noticed
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Old 20.08.2011, 05:46
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Re: Experts predict the housing bubble is about to burst

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....
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Old 20.08.2011, 08:37
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Re: Experts predict the housing bubble is about to burst

I think for at least the next 12 months, prices will stay high. However, if Europe and the US don't manage their problems, Switzerland will become infected as jobs/manufacturing get shifted overseas and the finance sector is forced to cut back.

The Swiss market is very localised. Stadt Zürich,Geneva and Zug and surrounding suburbs will continue to boom no matter what.
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Old 20.08.2011, 09:17
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Re: Experts predict the housing bubble is about to burst

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It's not a very Swiss thing to buy ones own house, if they do, they buy one house in their life & dont expect to sell it. .
Not anymore, my friend. The Swiss have seen it's much cheaper to buy a house / flat in the longterm. Most Swiss I know have bought their own property or are renting because they are in a cheap apartment and/or are looking for a place to buy. The way of the world.
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Old 20.08.2011, 09:45
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Re: Experts predict the housing bubble is about to burst

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Not anymore, my friend. The Swiss have seen it's much cheaper to buy a house / flat in the longterm. Most Swiss I know have bought their own property or are renting because they are in a cheap apartment and/or are looking for a place to buy. The way of the world.
Certainly that way where I live. People have been taking advantage of low interest rates to buy new and renovate old housing. This has fuelled a boom in the construction of so called "villas" - modest sized individual homes on small plots - in addition to high density apartments. Any bit of greenfield land within the construction zone is being built on to fill the demand.
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Old 20.08.2011, 10:02
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Re: Experts predict the housing bubble is about to burst

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It's not a very Swiss thing to buy ones own house, if they do, they buy one house in their life & dont expect to sell it.
The first part of what you state is just not true. Depending on whom I speak to (Swiss persons) some will say, we all want to buy our house, others not.

Many Swiss people cannot afford to buy a house - unsuprisingly, just like the many "rich" expats who can't either.

The second part of your statement, however, highlights the key difference - the motivation to buy houses is different. Most UK homeowners do so to make a profit with an eye on resale value. In CH, housebuying - unless you are a company - is an individual non-monetary investment for the long-term future. All IMO of course
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