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Old 28.11.2011, 08:52
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Housing bubble about to explode in the Arc Lemanique

I have been hesitating to buy a flat in Nyon for 1.4M CHF but given the recent news, I'm definitively giving up. I already wasn't able to sleep at night and now this:

http://www.lematin.ch/actu/economie/...ser-2011-11-26

UBS and Wuest+Partner now openly talking about a real estate bubble, and not risk zone in the Lac Geneva area...

And if you already bought (recently), expect a call from the bank over the next 24-36 months for reimbursing the value difference...

This, together with the Euro meltdown economic crisis which will hit this region even stronger than elsewhere in Switzerland: "bonne nuit"...

I'm calling the company and taking my 25K CHF deposit back.
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Old 28.11.2011, 09:15
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Re: Housing bubble about to explode in the Arc Lemanique

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And if you already bought (recently), expect a call from the bank over the next 24-36 months for reimbursing the value difference...
Why? If I buy 1 milion SFR house, I put down 200.000 deposit for the bank to get the loan, I will have 800.000 SFR left to give back for the next 30 years.

If the price of the house changes, I will still have the same money to give back for the course of 30 years, so why should I reimburse the value difference when I will pay the initial price as agreed in the course of 30 years?
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Old 28.11.2011, 09:31
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Re: Housing bubble about to explode in the Arc Lemanique

If the value of the house decreases, then the bank has the right to ask you to increase your contribution to the mortgage so that the risk is transfered to you...
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Old 28.11.2011, 09:34
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Re: Housing bubble about to explode in the Arc Lemanique

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I have been hesitating to buy a flat in Nyon for 1.4M CHF but given the recent news, I'm definitively giving up. I already wasn't able to sleep at night and now this:

http://www.lematin.ch/actu/economie/...ser-2011-11-26

UBS and Wuest+Partner now openly talking about a real estate bubble, and not risk zone in the Lac Geneva area...

And if you already bought (recently), expect a call from the bank over the next 24-36 months for reimbursing the value difference...

This, together with the Euro meltdown economic crisis which will hit this region even stronger than elsewhere in Switzerland: "bonne nuit"...

I'm calling the company and taking my 25K CHF deposit back.
Other than a chalet in the mountains, I wouldn't bother with buying a house in Switzerland. You are never suppose to pay it off and for the same money, you'll get a helluva lot more house in other places.
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Old 28.11.2011, 09:36
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Re: Housing bubble about to explode in the Arc Lemanique

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Other than a chalet in the mountains, I wouldn't bother with buying a house in Switzerland. You are never suppose to pay it off and for the same money, you'll get a helluva lot more house in other places.
http://www.propertyuncovered.com/for...-in-kabul.html
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Old 28.11.2011, 09:38
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Re: Housing bubble about to explode in the Arc Lemanique

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Other than a chalet in the mountains, I wouldn't bother with buying a house in Switzerland. You are never suppose to pay it off and for the same money, you'll get a helluva lot more house in other places.
That's all relative. It is/was cheaper for me to buy the house I need with my family than rent. Something like 50% of the cost.
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Old 28.11.2011, 09:40
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Re: Housing bubble about to explode in the Arc Lemanique

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That's all relative. It is/was cheaper for me to buy the house I need with my family than rent. Something like 50% of the cost.
I understand that..but where is pride of ownership? Basically, you end up renting at a discounted rate...and what do you have to show for after 30 years of paying discounted rent?
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Old 28.11.2011, 09:44
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Re: Housing bubble about to explode in the Arc Lemanique

I was actually going to list my house for sale here today too so im going to dismiss the article as scaremongering
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Old 28.11.2011, 09:45
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Re: Housing bubble about to explode in the Arc Lemanique

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Other than a chalet in the mountains, I wouldn't bother with buying a house in Switzerland. You are never suppose to pay it off and for the same money, you'll get a helluva lot more house in other places.
But just think of the commute!
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Old 28.11.2011, 09:49
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Re: Housing bubble about to explode in the Arc Lemanique

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Why? If I buy 1 milion SFR house, I put down 200.000 deposit for the bank to get the loan, I will have 800.000 SFR left to give back for the next 30 years.

If the price of the house changes, I will still have the same money to give back for the course of 30 years, so why should I reimburse the value difference when I will pay the initial price as agreed in the course of 30 years?
First of all, no swiss bank engages on a 30yr loan. Every time you ask to renew your 2/3/5 yr loan slice, it's a new contract. And banks have the right (and obligation, read the interview!) to re-evaluate your property. If prices went up, it's ok. However, if the value of the property has fallen, they will ask you to reimburse the difference. This actually happened during the 90's bubble and put a lot of people under pressure because a) interest rates went up, so the monthly rates exploded and b) they had to put their savings into reimbursing the bank loan difference.

If you buy now, you may be safe for the next 12-24 months, but then you will be ending up paying much more. This will bring down prices even further. Remember that during the 90's bubble burst, in Geneva, prices went down by 35-40%.
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Old 28.11.2011, 09:52
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Re: Housing bubble about to explode in the Arc Lemanique

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That's all relative. It is/was cheaper for me to buy the house I need with my family than rent. Something like 50% of the cost.
Yes, now, but wait until you renew your loan with prices falling, mortgage rising (easily from 1.5% to 3% in 2-3 years, so there goes your 50%), and the bank re-evaluating your property. Won't be fun ... Buying property engages you for 20-30 years and not just for the current "rates are soo low and economic downturn is for the others" period...
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Old 28.11.2011, 09:58
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Re: Housing bubble about to explode in the Arc Lemanique

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Yes, now, but wait until you renew your loan with prices falling, mortgage rising (easily from 1.5% to 3% in 2-3 years, so there goes your 50%), and the bank re-evaluating your property. Won't be fun ... Buying property engages you for 20-30 years and not just for the current "rates are soo low and economic downturn is for the others" period...
I genuinely beleive that the world economy is in such a mess because of articles like this and people promoting them/beleiving them.
Stops everyone spending and ends up becoming a self fullfilling prophecy..
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Old 28.11.2011, 10:11
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Re: Housing bubble about to explode in the Arc Lemanique

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I genuinely beleive that the world economy is in such a mess because of articles like this and people promoting them/beleiving them.
Stops everyone spending and ends up becoming a self fullfilling prophecy..
This has nothing to do with self fulfilling prophecies but about opening your eyes to reality. The real estate price growth over the last 5yrs in Lac Leman area is clearly above any sustainable limit and will eventually follow gravity.

And the trigger will be either economic downturn, or raising interest rates (the SNB already warned about this), but probably both. Easy-living expat times are definitively over.

If even UBS (heavily involved in mortgage around the region) starts to ring the alarm bell, it's a really bad sign.
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Old 28.11.2011, 10:16
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Re: Housing bubble about to explode in the Arc Lemanique

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This has nothing to do with self fulfilling prophecies but about opening your eyes to reality. The real estate price growth over the last 5yrs in Lac Leman area is clearly above any sustainable limit and will eventually follow gravity.

And the trigger will be either economic downturn, or raising interest rates (the SNB already warned about this), but probably both. Easy-living expat times are definitively over.

If even UBS (heavily involved in mortgage around the region) starts to ring the alarm bell, it's a really bad sign.
its simple supply and demand.. there arent enough house/apartments. People still need a roof over their head no matter what the prices are.. there is no way they will drop, worse case is they will level off surely?

even if interest rates went up 2 % mortgage rates are still extremely reasonable and cheaper than renting.

Im opening my eyes and im not seeing what you are seeing for sure....
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Old 28.11.2011, 10:29
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Re: Housing bubble about to explode in the Arc Lemanique

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its simple supply and demand.. there arent enough house/apartments. People still need a roof over their head no matter what the prices are.. there is no way they will drop, worse case is they will level off surely?
Just read the article and judge by yourself.

In any case, your argument would prevent any price correction anywhere in the world (excepting places like Spain where clearly too much construction was going on), but reality shows the opposite.

What did US or UK citizens do after their housing market went burst? More specifically, people living in London or New York where there is clearly a shorfall of supply? They still had a roof over their heads (hm, maybe not all of them), but far less money (or none at all) in their pockets or bank accounts.
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Old 28.11.2011, 10:39
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Re: Housing bubble about to explode in the Arc Lemanique

yes, but its not going to burst , thats the point?

Round where i live there are waiting lists for houses at estate agents, queues to get apartments. Check how many are advertised on here? Probably none.

The house prices didnt really burst in NY or London.. have a look at the prices still??

How did these people have less money in their pockets anyway? If the house prices went down then as long as they didnt sell it there is no affect to them.. except slightly higher repayments.

Geneva and the area is special, there are not enough houses. There is absolutely no way prices can drop when so many people want somewhere to live. If you are saying its because of interest rates then they could go up 10% and it would still be cheaper than renting.

I hope you dont lose CHf 25,000 on the strenght of an article you read in a newspaper
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Old 28.11.2011, 10:41
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Re: Housing bubble about to explode in the Arc Lemanique

Just a few random observations...

1. if you are talking about over construction, look at Dubai.

2. In a place like Gilly which is up in the Mountains, really at the back of beyond, I remember you could buy a villa in 2005-2007 for about 600K.. The other day I saw an ad for project there where the prices started at 980K

3. Just outside of Nyon station a project called Central Parc was advertised by a developer called Jean Wicki in 2006. You could buy a 95 Sq mtr apartment for about CHF695k. The developer didn't get the necessary permissions and the project stalled for almost 4 years. Now its taken over by Rytz and a one bedroom place of 55 Sq mtrs with loggia costs CHF680k.

In the small village near Nyon where I live, there are at least 4 constructions projects going on and one just completed. All apartments of say 110-120 Sq mtrs costing on an average about a million CHF
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Old 28.11.2011, 10:54
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Re: Housing bubble about to explode in the Arc Lemanique

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The house prices didnt really burst in NY or London.. have a look at the prices still??



http://therealestatefountain.com/201...-and-new-york/

"«a peut que continuer a monter, si, si"

And yes, I just got my 25K deposit back. Good luck to all of you about to buy.
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Old 28.11.2011, 10:56
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Re: Housing bubble about to explode in the Arc Lemanique

The bubble to burst would require that people in Switzerland stop buying houses... Do you really think THAT will happen in Switzerland? Remember people are overpaying for everything here...
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Old 28.11.2011, 11:00
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Re: Housing bubble about to explode in the Arc Lemanique

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Just a few random observations...
3. Just outside of Nyon station a project called Central Parc was advertised by a developer called Jean Wicki in 2006. You could buy a 95 Sq mtr apartment for about CHF695k. The developer didn't get the necessary permissions and the project stalled for almost 4 years. Now its taken over by Rytz and a one bedroom place of 55 Sq mtrs with loggia costs CHF680k.
A clear sign that this is a sustainable growth rate, ain't it?

Looking at past (even recent) growth isn't a future growth indicator. Just look how the Euro zone is going into recession, do you really believe this won't affect your job just because your company sent you to CH?

Anyway, it's not me who is predicting a burst, it's just a bunch of people around a small bank named UBS or something like that.
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