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View Poll Results: What do you do in Switzerland?
I own, plan to buy or will definitely buy a property one day! 84 51.22%
I rent, will never buy or will always be renting no matter how long stay! 24 14.63%
I rent because cannot afford to buy now but would buy if possible! 45 27.44%
I buy to invest but stay in rental property! 4 2.44%
I think renting is safer than buying in case real estate collapses. 19 11.59%
Multiple Choice Poll. Voters: 164. You may not vote on this poll

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  #41  
Old 18.11.2014, 18:29
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Re: What's your expats opinion on buying vs renting

Certainly those who bought in early 90's got very burnt, toasted totaly but as of mid 90's, 1996, those people have done well / figure 6/page 211 of graph provided by "NotAllThere" (although looking at your posts, the "Not" seems a little superfluous in your name !)

The bubble was really from 1985 - 1995 during this time prices were very inflated.
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  #42  
Old 18.11.2014, 19:15
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Re: What's your expats opinion on buying vs renting

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Certainly those who bought in early 90's got very burnt, toasted totaly but as of mid 90's, 1996, those people have done well / figure 6/page 211 of graph provided by "NotAllThere" (although looking at your posts, the "Not" seems a little superfluous in your name !)

The bubble was really from 1985 - 1995 during this time prices were very inflated.
Even then, not very burnt... Not exactly like the UK housing crash or even the whole sub-prime issues...
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  #43  
Old 18.11.2014, 19:40
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Re: What's your expats opinion on buying vs renting

If the poll option number one reaches 100 votes, it means just about the time to cancel the rental agreement and prepare all possible funds for deposit
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  #44  
Old 18.11.2014, 20:53
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Re: What's your expats opinion on buying vs renting

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yes...

... Perhaps some of you will come back and tell me that your rent was more expensive back in 1980...
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Not 1980, but it's been the same since 1993.

However, we bought it yesterday by putting about a third down, and getting a ten year interest only mortgage.

Tom


Oh, Thank goodness, Tom, as it was you I had in mind that might be able to give me a stat just like that, and I am so glad you came through for me
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  #45  
Old 05.04.2016, 09:39
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Re: What's your expats opinion on buying vs renting

I've been thinking about buying mainly to reduce rent, which makes me weep if I think about it, but

1. It's a lot if cash to tie up in a potentially depreciating property

2. If I have to leave CH, I'm left with a property I possibly can't rent out or sell.

3. The debt remains huge forever.

4. The places I can afford aren't as nice as where I rent.

5. I quite fancy a chateau in France (for less than an apartment in CH)
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  #46  
Old 05.04.2016, 09:57
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Re: What's your expats opinion on buying vs renting

We have been renting for years and are a month away from moving into a house we designed with an architect.
I can wait to move into our own place.
I have smooth plastered, coloured walls, I can do laundry whenever I want, play music over 'lunchtime' use my cinema surround sound after 10pm etc etc

Its not a cheap option but the interest on the loan was low and from all the years of renting (an on Expat contracts) we had been able to save up a sizeable deposit.
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  #47  
Old 05.04.2016, 09:59
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Re: What's your expats opinion on buying vs renting

While I agree with your assessment of risks in an illiquid market, a comment on this:

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3. The debt remains huge forever.
The debt only remains huge forever if you don't pay it off. If you wish to pay off or pay down the mortgage simply structure it in a way that makes sense for you to do so. Although not the norm, you can pay off each tranche when it comes due.

Many Swiss keep a perpetual mortgage because it is tax advantageous for them. But YMMV - and if you would prefer to pay your mortgage down/off, there is nothing stopping you from doing so. Your banker's head might explode, but that's his/her problem.
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  #48  
Old 05.04.2016, 10:09
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Re: What's your expats opinion on buying vs renting

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We have been renting for years and are a month away from moving into a house we designed with an architect.
I can wait to move into our own place.
I have smooth plastered, coloured walls, I can do laundry whenever I want, play music over 'lunchtime' use my cinema surround sound after 10pm etc etc

Its not a cheap option but the interest on the loan was low and from all the years of renting (an on Expat contracts) we had been able to save up a sizeable deposit.
I'm jealous and looking forward to the house warming party.
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  #49  
Old 05.04.2016, 10:11
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Re: What's your expats opinion on buying vs renting

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While I agree with your assessment of risks in an illiquid market, a comment on this:



The debt only remains huge forever if you don't pay it off. If you wish to pay off or pay down the mortgage simply structure it in a way that makes sense for you to do so. Although not the norm, you can pay off each tranche when it comes due.

Many Swiss keep a perpetual mortgage because it is tax advantageous for them. But YMMV - and if you would prefer to pay your mortgage down/off, there is nothing stopping you from doing so. Your banker's head might explode, but that's his/her problem.

Good point. But what provides a better return: paying off a huge mortgage or putting your money somewhere else?

Mind you, living in CH rent free would be pretty awesome.
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  #50  
Old 05.04.2016, 10:18
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Re: What's your expats opinion on buying vs renting

http://lenews.ch/2015/03/11/swiss-pr...-the-way-down/
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  #51  
Old 05.04.2016, 10:32
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Re: What's your expats opinion on buying vs renting

Very interesting.
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  #52  
Old 05.04.2016, 12:14
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Re: What's your expats opinion on buying vs renting

Have to say we're still unsure of what we'll do if we stay. Coming from a place where "everyone" owns, it feels odd to rent. On the other hand, renting has its advantages when you're geographically mobile for work. We've never lived anywhere for more than 4 years, and we already bought and sold twice between 2006 and 2014, it's not that fun either even in a liquid market like Norway.

So far, our thinking goes in the direction renting wherever we/husband live(s) Monday to Friday and buying in the mountain, possibly with the Troll and me living there permanently and Trollefar commuting and keeping a pad in the city. One reason is that while I can't see myself staying my entire life in any city, I can see myself keeping the same alpine heaven until I pass away (preferably up there). We have a very "home is a place to sleep and do the laundry" attitude anyway.

Still in the thinking box, will not do anything before 2018 at the very earliest anyway.
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  #53  
Old 28.03.2017, 00:45
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Re: What's your expats opinion on buying vs renting

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Many Swiss keep a perpetual mortgage because it is tax advantageous for them.
I never understood this and the other day I tried simulating the two options on the zurich private tax software, i.e., having a fixed income plus a 1M property in CH, with and without a 700k debt.

I found that, yes, I would pay more taxes if I had no debt, but the difference in tax would be lower than what I would be paying the bank in interests (I used a 1.5% interest rate).

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  #54  
Old 28.03.2017, 09:56
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Re: What's your expats opinion on buying vs renting

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I never understood this and the other day I tried simulating the two options on the zurich private tax software, i.e., having a fixed income plus a 1M property in CH, with and without a 700k debt.

I found that, yes, I would pay more taxes if I had no debt, but the difference in tax would be lower than what I would be paying the bank in interests (I used a 1.5% interest rate).

Spend 5000 to save 1600 tax, some people believe thats a good deal.
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  #55  
Old 28.03.2017, 09:59
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Re: What's your expats opinion on buying vs renting

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Spend 5000 to save 1600 tax, some people believe thats a good deal.
Also, I'd rather pay taxes than the bank, unless the difference was substantial.

Yet, everyone keeps telling me that it's good to keep the mortgage forever, I don't get it.
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  #56  
Old 28.03.2017, 10:18
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Re: What's your expats opinion on buying vs renting

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Also, I'd rather pay taxes than the bank, unless the difference was substantial.

Yet, everyone keeps telling me that it's good to keep the mortgage forever, I don't get it.
You need to look long term - how many people would rather have the 700k (not paid off portion) at retirement over a fully paid off house?

You need to compare apples with apples
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  #57  
Old 28.03.2017, 10:58
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Re: What's your expats opinion on buying vs renting

It is the opportunity cost of paying back the mortgage. People can invest their money in things that earn a higher rate of return or to buy things with a higher rate of borrowing (like a car loan or leasing) compared to the interest rate on the mortgage.

The money that could have used to pay back our mortgage was sitting in a Postfinance account for a few years earning a 0.5% to 1% higher rate of interest than we were paying on our mortgage. We were also able to deduct the cost of borrowing on our tax declaration.

We've paid less then 1% interest for the past 5 years. We saved the money, renovated and renovated our home (without having to ask for extra borrowing at a higher rate). The rest of the money was invested in a number of things that earned a better rate of return. Spent quite a bit on holidays too ;-)
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  #58  
Old 28.03.2017, 11:43
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Re: What's your expats opinion on buying vs renting

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It is the opportunity cost of paying back the mortgage. People can invest their money in things that earn a higher rate of return or to buy things with a higher rate of borrowing (like a car loan or leasing) compared to the interest rate on the mortgage.
OK, this I can understand. Yet, I hear people saying that they do it for TAX reasons.

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The money that could have used to pay back our mortgage was sitting in a Postfinance account for a few years earning a 0.5% to 1% higher rate of interest than we were paying on our mortgage.
Obviously this is not the case today. I guess you got lucky there?

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We were also able to deduct the cost of borrowing on our tax declaration.
Well, you can deduct the interests paid from your taxable income, yes, but that means you only get back that 20/30% of taxes which you would be paying on those interests.

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We've paid less then 1% interest for the past 5 years.
You have a variable interest rate mortgage, I guess?
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  #59  
Old 28.03.2017, 12:17
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Re: What's your expats opinion on buying vs renting

You can also deduct the mortgage amount from your taxable wealth.

Tom
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  #60  
Old 28.03.2017, 12:27
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Re: What's your expats opinion on buying vs renting

Additionally... the mortgage can be offset against Eigenmietwert... a theoretical rental value of your home, set by the authorities, which is added to your income whether you rent it out or not.

This takes a bit of getting your head around.
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