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Old 16.10.2011, 17:32
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Housing prices in Zurich

Hi All,

Though i am quite new here, from people and friends i heard the house prices have sky rocketed in the past 2-4 years....

I am planning to buy an apartment around Zurich and it seems quite impossible. The question i got myself hanging around is that whether it is a bubble and is there a possibility that the prices might come down in a year or two...?

Is it worth buying right now?

ram.
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Old 17.10.2011, 09:35
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Re: Housing prices in Zurich

I don't think there ever really has been a bubble in terms of property here. The prices are what they are.

Maybe some experts might know better, but you really actually have to pay that much money.
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Old 17.10.2011, 09:39
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Re: Housing prices in Zurich

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Hi All,

Though i am quite new here, from people and friends i heard the house prices have sky rocketed in the past 2-4 years....

I am planning to buy an apartment around Zurich and it seems quite impossible. The question i got myself hanging around is that whether it is a bubble and is there a possibility that the prices might come down in a year or two...?

Is it worth buying right now?

ram.

In some places they've gone up a fair bit in the past few years. I know of 30% increases in the last 3 years but it's all about location and there are other places nearer to Zurich where prices have not risen so sharply, or indeed much at all.

It doesn't look like a bubble to me.
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Old 17.10.2011, 10:25
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Re: Housing prices in Zurich

Prices for property have been increasing quite a lot since about 10 years, and to be honest I don't believe they will go down. A house/ apartment in Zürich is expensive, and will stay so. A good terrain, for example, is quite tricky to find. As morbid as this might sound, some future heirs have buyer waiting lists for the day their familiars die.

The advantage at the moment is the loan at the bank, which you can get at a pretty good rate.

You can always wait one or two years if you want to be careful. But I really don't believe this is going down.
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Old 17.10.2011, 10:39
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Re: Housing prices in Zurich

Take a look at Credit Suisse research pages and read the info on real estate prices. Should give you something to think about!!

https://www.credit-suisse.com/ch/unt...ysen/index.jsp
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Old 17.10.2011, 10:57
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Re: Housing prices in Zurich

In my area (Ausserschwyz) there most definitely is a bubble; prices have skyrocketed.

To give you an idea, I bought our home 8 years ago for a (for Switzerland ) modest price. There are 5 other houses in the Quartier with the same floor plan - albeit less than half the land we have.

One house sold 6 years ago for about 10% more than we paid for ours.
Another sold 4 years ago for somewhere between 10-15% more than we paid for ours.
Another sold 2 years ago for about 60% more than we paid or ours.
There is one currently on the market for 130% more than we paid for ours - the seller is currently deciding between about half a dozen offers.

This is beyond crazy.


(Oh how I wish I could put my house on the market... but we can't find anything suitable in the area. Can't sell until we have somewhere to go.)
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Old 17.10.2011, 10:59
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Re: Housing prices in Zurich

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Old 17.10.2011, 11:04
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Re: Housing prices in Zurich

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As morbid as this might sound, some future heirs have buyer waiting lists for the day their familiars die.
I know of one case where the owners have asked for a fee/deposit to go on that waiting list...
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Old 17.10.2011, 11:04
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In some places they've gone up a fair bit in the past few years. I know of 30% increases in the last 3 years but it's all about location and there are other places nearer to Zurich where prices have not risen so sharply, or indeed much at all.

It doesn't look like a bubble to me.
Asking prices may be up however in many cases the properties never sold & have been on the market for years. The truth is there is no market in ch , turnover is very low.
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Old 17.10.2011, 11:11
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Re: Housing prices in Zurich

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In some places they've gone up a fair bit in the past few years. I know of 30% increases in the last 3 years but it's all about location and there are other places nearer to Zurich where prices have not risen so sharply, or indeed much at all.
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Asking prices may be up however in many cases the properties never sold & have been on the market for years. The truth is there is no market in ch , turnover is very low.
Sorry, I should have said the prices that houses have sold at has increased by 30% in three years.

And, for all those on this forum who repeatedly say that the advertised sale price is the maximum price that a house will sell at is talking rubbish as well.

From what I have seen, it's the same as the U.K.: The price a house will sell at is the price that people are willing to pay and if it means that two or more interested parties have a bit of a bidding war then they will, and they do.

And good properties (location, location, location) can sell very quickly.
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Old 17.10.2011, 11:15
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Re: Housing prices in Zurich

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From what I have seen, it's the same as the U.K.: The price a house will sell at is the price that people are willing to pay and if it means that two or more interested parties have a bit of a bidding war then they will, and they do.
That really depends on who is selling it. We checked quite a bit of property and there were 2 types of sellers: "first come first served" and the bidding type. The bidding type was less common, though, but might have to do with our targets.

Quote:
And good properties (location, location, location) can sell very quickly.
That is very much true. Some great houses I saw were sold in a week after being put in the market... Of course the dead fat horses no-one buys are still lingering in the immobilien companies...
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Old 17.10.2011, 11:19
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Re: Housing prices in Zurich

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That really depends on who is selling it. We checked quite a bit of property and there were 2 types of sellers: "first come first served" and the bidding type. The bidding type was less common, though, but might have to do with our targets.
True, but I've seen numerous posts on here which have said it's not the Swiss way.

Not very helpful if you want to maximise your profit when you want to sell (and unless you are selling to family or are otherwise feeling particularly altruistic, why wouldn't you?)
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Old 17.10.2011, 11:20
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Re: Housing prices in Zurich

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Is it worth buying right now?

This is like saying is the next spin of the roulette wheel going to be Black or Red?

No one knows and people's opinions are biased by what they own or not own and their overall economic sentiment.

My rule of thumb is if you're asking the question (is it worth buying?) then it's probably not worth buying.

Last edited by The_Love_Doctor; 17.10.2011 at 11:36. Reason: error...
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Old 17.10.2011, 11:27
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Re: Housing prices in Zurich

Prices have increased substantially, but neither as much as in the UK/US, nor because of cheap money/subprime loans, but because of high demand and lack of space. In the long run, prices will have to go down (smoothly) in real terms, or increase at a slower pace, since a much larger increase in real housing prices than in real income is unsustainable. However, local bubbles (Wollerau etc.) might burst if a community is forced to increase tax rates (e.g. because a large company moves away).
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Old 17.10.2011, 11:33
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Re: Housing prices in Zurich

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err yeh that chart is misleading... it's annual percentage changes which shows persistant and sustained year on year small percentage increases...

Edit: the small increases tend to be followed by a big decrease...

Try this for a better picture!

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Old 17.10.2011, 11:40
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Re: Housing prices in Zurich


So what happened in the 1990's?

(just curious?....... If I was to follow a 'trend', I'd be interested in the triggers to see if history was to repeat itself?)
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Old 17.10.2011, 11:44
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Re: Housing prices in Zurich

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So what happened in the 1990's?

(just curious?....... If I was to follow a 'trend', I'd be interested in the triggers to see if history was to repeat itself?)
The 1990s - a crashing decade



Swiss apartment prices boomed during the late 1980s and early 1990s, with rental apartment prices rising on average by 14% annually from 1988 to 1991.
Other properties’ prices rose strongly too. Single-family homes rose on average 13.87% a year from 1988 to 1989, and owner-occupied flats by 10.4%.
To tame what it saw as runaway house price inflation, the Swiss National Bank (SNB) aggressively raised interest rates. Mortgage rates rose to 7.9% in October 1992, up from 4.9% in January 1989. Since most Swiss mortgages then were variable rate (about 76% of all loans in 1994), the impact was severe.
Apartment prices fell by 9% in 1993, followed by another 9% in 1994, and 8.3% in 1996. From 1993 to 2000, apartment prices fell by an average of 6% yearly. The average price of single-family homes fell by an average of 2.57% annually from 1990 to 1999, while the price of owner-occupied flats fell 2.72% annually from 1991 to 1998.
Stagnating real incomes, slow population growth, weak net migration and increased housing supply led to further house price falls. By 2000, apartment prices were back to their 1987 level. The crash had wiped out a decade’s gains.


Srouce: Global Property Guide

Edit: a lesson for people who don't want to look at history is: as soon as the SNB decides that house prices are over valued and start aggressively raising interest rates again, it's gonna be the 1990s all over again... People just tend to ignore this as they rather not think about such consequences.
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Old 17.10.2011, 12:06
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Re: Housing prices in Zurich

I honestly believe it will fall in the near future. the only reason people can afford right now is because of the bank loan rates. If the Euro hadn't fell the rates would not be this low... foreign investment (vacation housing) is falling rapidly. It wont be an overnight thing cause as Fatman says it is a very slow turnover market. I also see with colleagues adjusting the prices of their houses every other week cause some people really want to sell quick as they believe we are in a bubble.

I find prices here to be a joke....but what do I know
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Old 17.10.2011, 12:14
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Re: Housing prices in Zurich

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err yeh that chart is misleading... it's annual percentage changes which shows persistant and sustained year on year small percentage increases...
how is it misleading? it's the same data as the other chart you posted. in fact, i got them from the same page:

http://www.homes.ch/swiss_property_prices.htm
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Old 17.10.2011, 12:17
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Re: Housing prices in Zurich

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how is it misleading? it's the same data as the other chart you posted. in fact, i got them from the same page:

http://www.homes.ch/swiss_property_prices.htm

Because when you look at it it gives an impression that the market is stable, when the underlying price has risen significantly...
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