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Old 30.07.2012, 13:59
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Discounts of 15% on real estate prices in Geneva area

This article gives quite some information on where the Geneva area real estate market is heading to. With recent limitations imposed by FINMA and banks, margins for down negotiating prices are of 15% ... in average. If you look to buy anything above 5M, it goes to 20% of discount. And apparently this is just the beginning.

http://www.sonntagonline.ch/ressort/wirtschaft/2414/

IMHO, it was clear this was going to happen... I should try to sell before it's too late ...
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Old 31.07.2012, 20:25
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Re: Discounts of 15% on real estate prices in Geneva area

the higher-end rental market (4000CHF+) in Geneva isn't doing very well because afflux of wealthy subsidized expats is going down.. here as well, discounts of up to 20% possible:


http://m.letemps.ch/Page/Uuid/2d9597...e-9eee89d705f2
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Old 02.09.2012, 21:02
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Re: Discounts of 15% on real estate prices in Geneva area

Swiss real estate prices have fallen for the first time since 5 years:


Sonntagszeitung: "Im August sind erstmals die Preise gesunken"

http://www.sonntagszeitung.ch/wirtsc...?newsid=228333


Le Temps: "L'accalmie immobilière se confirme"

http://www.letemps.ch/Page/Uuid/6be1...re_se_confirme
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Old 17.09.2012, 20:21
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Oh goodie
Now Please tell me this will come to Zurich soon
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Old 21.09.2012, 09:08
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Re: Discounts of 15% on real estate prices in Geneva area

Heard from friends from a glocals event early this week (www.glocals.ch) where NAEF and UBS presented their view on the Geneva region real estate market, summary:

Transaction prices in Geneva area have been dropping from 2011 peaks by 10-15%, trend further downwards, NAEF expects this to reach 20% early 2013. Average discount on asking prices is 15%. Reasons: immigration in Romandie albeit still high lowering down, strong CHF, multinationals not hiring or laying off, therefore less demand.

UBS claims that in practically all cases the value of the house/flat is significantly lower than the asking price (example given: 2M CHF asking price, bank says 1.6M out of which they will finance 80% so 1.3M)

NAEF calls this a healthy correction rather than a bubble explosion, but for somebody who euphorically bought last year and is selling now or next year, he may well have lost his 20% down payment.
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Old 21.09.2012, 11:42
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Re: Discounts of 15% on real estate prices in Geneva area

Very interesting news indeed.
Whether it is a bubble or not, I'm sure time will tell. However, it is an indication of the global recession hitting the door of Switzerland (indirectly).
I'm curious to see how this market will move (especially in its lower-end).
Thanks for the heads up to the OP!
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Old 21.09.2012, 11:58
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Re: Discounts of 15% on real estate prices in Geneva area

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Heard from friends from a glocals event early this week (www.glocals.ch) where NAEF and UBS presented their view on the Geneva region real estate market, summary:

Transaction prices in Geneva area have been dropping from 2011 peaks by 10-15%, trend further downwards, NAEF expects this to reach 20% early 2013. Average discount on asking prices is 15%. Reasons: immigration in Romandie albeit still high lowering down, strong CHF, multinationals not hiring or laying off, therefore less demand.

UBS claims that in practically all cases the value of the house/flat is significantly lower than the asking price (example given: 2M CHF asking price, bank says 1.6M out of which they will finance 80% so 1.3M)

NAEF calls this a healthy correction rather than a bubble explosion, but for somebody who euphorically bought last year and is selling now or next year, he may well have lost his 20% down payment.
Interesting well we bought this year so:

It is all relative, I am just glad we are now owners and can afford to live here now, renting was seriously expensive in comparison being over 3 times the price.

Typed in our postcode into homegate and guess what nothing for sale and the nearest 2 Km away is 40% more expensive than what we paid for, ours is new, those are 15 years + old. That is for similar sq. metres but our place is a nicer location. However guess they may sell for less?

If we had not bought it was only a matter of time before we would most probably have to move away most probably out of Switzerland. Depends what you want, we want our children to grow up here, after that who knows.
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Old 21.09.2012, 15:38
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Re: Discounts of 15% on real estate prices in Geneva area

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Interesting well we bought this year so:

It is all relative, I am just glad we are now owners and can afford to live here now, renting was seriously expensive in comparison being over 3 times the price.

Typed in our postcode into homegate and guess what nothing for sale and the nearest 2 Km away is 40% more expensive than what we paid for, ours is new, those are 15 years + old. That is for similar sq. metres but our place is a nicer location. However guess they may sell for less?

If we had not bought it was only a matter of time before we would most probably have to move away most probably out of Switzerland. Depends what you want, we want our children to grow up here, after that who knows.
I guess it depends on how much down payment you invested. With ~50%, it may work out once rates start to rise again.

But with the classic 20%, once rates increase back to the average (say 3.5%-4% - so 2x-3x what we have now), add to that maintenance costs, and you will be paying more than a rent.

In addition, the market value of your house will decrease as buying becomes less attractive. You may lose your down payment and even face a margin call.

UBS predicts interest rates to raise from mid 2013 on.
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Old 21.09.2012, 16:07
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Re: Discounts of 15% on real estate prices in Geneva area

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I guess it depends on how much down payment you invested. With ~50%, it may work out once rates start to rise again.

But with the classic 20%, once rates increase back to the average (say 3.5%-4% - so 2x-3x what we have now), add to that maintenance costs, and you will be paying more than a rent.

In addition, the market value of your house will decrease as buying becomes less attractive. You may lose your down payment and even face a margin call.

UBS predicts interest rates to raise from mid 2013 on.
I think not, fixed rate & I have money to pay off the rest when it is due in ten years time. Also maintenance costs are low as it is brand new min-energy.

Care to do your sums again

Also no margin call possible as the price is guaranteed, details elswhere on this website if you care to use the search!
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Old 21.09.2012, 21:38
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Re: Discounts of 15% on real estate prices in Geneva area

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I think not, fixed rate & I have money to pay off the rest when it is due in ten years time.
great for you as you won't face a loan renewal.

Still, not really representative for the average geneva buyers who won't be able to pay back say 800K or 1M in 10 years time.
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Old 21.09.2012, 21:41
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Re: Discounts of 15% on real estate prices in Geneva area

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Oh goodie
Now Please tell me this will come to Zurich soon
I think that Zürich prices are high but not as insane as they got at the Lac Leman...
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Old 21.09.2012, 21:45
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Re: Discounts of 15% on real estate prices in Geneva area

If prices fall 20% and your deposit was 20%, the bank will soon come knocking for a further 20% deposit , it's something you agreed in the contract. In the last downturn the banks did make cash calls, be aware there are real dangers of ownership, you can't go bankrupt like in the US/UK, you have to clear your debts here.
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Old 25.09.2012, 12:48
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Re: Discounts of 15% on real estate prices in Geneva area

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Also no margin call possible as the price is guaranteed, details elswhere on this website if you care to use the search!
I did a search on "margin call", and only the thread below came up, which clearly says that margin calls do occur.

Swiss Mortgage Margin Calls
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Old 28.09.2012, 17:10
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Re: Discounts of 15% on real estate prices in Geneva area

Interesting blog: http://bustthatbubble.blogspot.ch/
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Old 28.09.2012, 21:41
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Re: Discounts of 15% on real estate prices in Geneva area

Silly blog...
Prices are clearly too high. But there is no way they will collapse like in the US. If they go down 15-20 per cent, that would be good but I doubt it.
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Old 28.09.2012, 22:07
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Re: Discounts of 15% on real estate prices in Geneva area

Ok, they can collapse like in Tokyo
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Old 28.09.2012, 22:20
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Re: Discounts of 15% on real estate prices in Geneva area

I assume you have not bought .... I will also assume it is your blog.

Tokyo was a different story altogether. I won't go into details

But in general this debate is like the one between Israelis and the Palestinians over Jerusalem. Long and pointless. To be fair i did say the prices were too high...
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Old 28.09.2012, 22:38
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Re: Discounts of 15% on real estate prices in Geneva area

I assume you have bought recently so you understandably may not be happy to read how the market is evolving.
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Old 28.09.2012, 22:43
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Re: Discounts of 15% on real estate prices in Geneva area

Correctomundo!

But I knew I overpaid, did not stretch my budget and bought in a nice town with no land available for further building.

I don't mind the market to go down. It will be healthier for everybody long term. And I am keenly aware that the stupidly overpriced properties are going down
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Old 28.09.2012, 22:54
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Re: Discounts of 15% on real estate prices in Geneva area

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If prices fall 20% and your deposit was 20%, the bank will soon come knocking for a further 20% deposit , it's something you agreed in the contract. In the last downturn the banks did make cash calls, be aware there are real dangers of ownership, you can't go bankrupt like in the US/UK, you have to clear your debts here.
what do they do (or did they do previously) if you don`t have another 20%, assuming you have never missed a payment on your current arrangement?
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