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  #101  
Old 28.01.2015, 11:43
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Re: Selling a cutie pie house but ...

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Maybe for a couple of days, but it's about 10% now unless retiring in a nearby Euro country. Pretty high food inflation in the Eurozone has taken care of a chunk of the 15% swing already.
Exactly- how long for? When we bought here 6 years ago, the £ was about 2.40. Things change all the time- and can't always be predicted.
Many who bought in France near Geneva are now panicking as the whole ball game is changing all the time, health insurance, tax loopholes closing (eg no more prentending to have second home in France and studio in GVA and claim studio is permanent address (French gov checking via use of utilities like gas, electricity), inheritance tax, etc- even though their pensions have gone up recently due to exchange rate.

Sure it would be very cheap perhaps to buy in Greece, or Spain.... but?
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  #102  
Old 28.01.2015, 11:53
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Re: Selling a cutie pie house but ...

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Sure it would be very cheap perhaps to buy in Greece, or Spain.... but?
Why not?

Telecommuting is supposed to be the way to go.

So if I can work from Spain, why should I freeze my ar*e off here in the Swiss winters.

Problem is, we are payed per unit of time spent and not per unit of work done. So if my boss sees me at my computer pretending to work while posting rubbish on EF, he's happy (actually I can see in the window reflection of his monitor that he's on EF too). But if I mention working from home, he goes into distrust mode. But ultimately its a mindset thing that needs to be overcome.
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  #103  
Old 28.01.2015, 12:01
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Re: Selling a cutie pie house but ...

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You made the same bloody comment about Switzerland!

How about this one for you:
In 2000, assuming 20% deposit and 4% interest (fixed 10 years) it would cost 16k per year interest + 5k (1% repayment of equity) = 21k to finance the house
In 2015, assuming 20% deposit and 1% interest (fixed 10 years) it would cost 6.8k per year interest + 8.5k (1% repayment of equity) = 15.3k to finance the house.
except maybe you have to double the costs in the second case due to higher cost of the house.
  #104  
Old 28.01.2015, 14:02
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Re: Selling a cutie pie house but ...

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except maybe you have to double the costs in the second case due to higher cost of the house.
Really?? Shall I add the workings so you aren't confused?

How about this one for you:
In 2000 500k house, assuming 20% deposit and 80% mortgage at 4% interest (fixed 10 years). It would cost 16k per year interest (400k*4%) + 5k (1% repayment of equity) = 21k to finance the house

In 2015 850k house, assuming 20% deposit and 80% mortgage 1% interest (fixed 10 years). It would cost 6.8k per year interest (680k*1%) + 8.5k (1% repayment of equity) = 15.3k to finance the house.

Does that help you understand??
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  #105  
Old 28.01.2015, 14:30
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Re: Selling a cutie pie house but ...

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So if my boss sees me at my computer pretending to work while posting rubbish on EF, he's happy (actually I can see in the window reflection of his monitor that he's on EF too).
He must think you're a workaholic Amogles !!
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  #106  
Old 28.01.2015, 14:59
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Re: Selling a cutie pie house but ...

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Really?? Shall I add the workings so you aren't confused?

How about this one for you:
In 2000 500k house, assuming 20% deposit and 80% mortgage at 4% interest (fixed 10 years). It would cost 16k per year interest (400k*4%) + 5k (1% repayment of equity) = 21k to finance the house

In 2015 850k house, assuming 20% deposit and 80% mortgage 1% interest (fixed 10 years). It would cost 6.8k per year interest (680k*1%) + 8.5k (1% repayment of equity) = 15.3k to finance the house.

Does that help you understand??
ok. now what happens with 4% repayment and 1% maintenance?
  #107  
Old 28.01.2015, 15:03
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Re: Selling a cutie pie house but ...

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Really?? Shall I add the workings so you aren't confused?

How about this one for you:
In 2000 500k house, assuming 20% deposit and 80% mortgage at 4% interest (fixed 10 years). It would cost 16k per year interest (400k*4%) + 5k (1% repayment of equity) = 21k to finance the house

In 2015 850k house, assuming 20% deposit and 80% mortgage 1% interest (fixed 10 years). It would cost 6.8k per year interest (680k*1%) + 8.5k (1% repayment of equity) = 15.3k to finance the house.

Does that help you understand??
No one is debating that it's currently cheap to finance a property. Rates are going to remain low for some time, which is nice for homeowners.

What is not nice, is the significant risk of a major property correction, making any rate savings meaningless. I think the OP's experience of dropping the price 200k CHF is a barometer for the state of the broader market. Mix in the decoupling of EUR/CHF, historically high property prices & lots of new property still being built... I can't conjure up a rosy picture that makes buying now a good idea.
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  #108  
Old 28.01.2015, 15:24
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Re: Selling a cutie pie house but ...

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the UBS report for 2015 includes the recent activity so provides quite a balanced view.

http://www.ubs.com/ch/en/swissbank/p...te-market.html
Thanks. That pretty much seems to agree with my comments above. Lake Geneva area down 6% in 2014.
That was also almost certainly written before the CHF Euro decoupling.
  #109  
Old 28.01.2015, 15:38
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Re: Selling a cutie pie house but ...

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ok. now what happens with 4% repayment and 1% maintenance?
1) 4% is atypical for a Swiss financing model. Typically it is 20% deposit then 1% capital repayment for 15 years.
2) The numbers become 23k and 23.8k respectively. Even your maths is good enough to know that 23.8k < 120% of 23k

As for house prices falling has little correlation to whether people make a profit or a loss on selling their property, that is entirely dependent on when people bought and for how much. Typically the Swiss buy for the long term - normally once they are settled - and will be looking to stay for 30+years.
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  #110  
Old 28.01.2015, 20:47
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Re: Selling a cutie pie house but ...

I guess the interest rate has a much bigger influence on the value of a house than the amount of expats that will leave the country or will not come.. Switzerland has become more and more desirable as it gets more expensive.

The SNB introduced all these new rules for banks to cool off the real estate market. they couldn't do it by raising interest rates so they came up with new rules for banks that offer these mortgage loans. This cooling off that is now happening will shave some % off the house prices but these were insane to begin with. Nothing like a crash of real estate will happen with these markets. Switzerland is too small and too desirable.
  #111  
Old 28.01.2015, 20:51
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Re: Selling a cutie pie house but ...

Parts of France and Spain are full of expats, many British- desperate but totally unable to sell, and in negative equity. Somehow I can't see this happening here (but hey ho, very ready to admit I am NO expert).
  #112  
Old 28.01.2015, 20:56
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Re: Selling a cutie pie house but ...

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Parts of France and Spain are full of expats, many British- desperate but totally unable to sell, and in negative equity. Somehow I can't see this happening here (but hey ho, very ready to admit I am NO expert).
I wouldn't mind buying French property from a desperate Brit... Why are they unable to sell? no buyers or are the houses under water?

a friend makes a decent living buying and selling houses in Spain. you would say that is not possible but yet thats what he is doing. As there is low volume in the market the prices are not efficient (correct). Thats an opportunity for buyers and sellers
  #113  
Old 28.01.2015, 21:38
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Re: Selling a cutie pie house but ...

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Thanks. That pretty much seems to agree with my comments above. Lake Geneva area down 6% in 2014.
That was also almost certainly written before the CHF Euro decoupling.
I agree some of the report matches the picture your painting but you do take the most negative outlook of it. It equally says there may only be a small correction or even just some price stagnation.

We bought last year, I.e, at the 'height' if it's to be believed, and I am still happy with the investment. it took us 18 months to find the house and I took a ten year mortgage with the full intention of remaining here for it. While house prices may correct in the coming years my outlook it on the 10 year timespan and I would think that by then my house should be worth at least as much as I bought it for.

There are so many other aspects to owning a home which are not directly financial though - doing it up (which is of course actually tax deductible so works as an investment in itself), breaking things without panicking because it's not yours, just a feeling of well being, that in the end I am happy we bought.
  #114  
Old 28.01.2015, 21:41
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Re: Selling a cutie pie house but ...

Reasons are so numerous, and different in Spain than in France. In some places in Spain, houses were built very cheaply and quickly by developers, with cheap materials which are falling apart and without the necessary infrastucture. In France, many expats fell in love with rural areas which are idyllic as holidays locations between May and mid October, then deserted and freezing for the rest of the time- often in villages deserted by the 'natives' and sold for silly prices. Then people get older, they miss the grandchildren, find it ver hard to learn the language, don't fit in, don't understand the health system or their doctor/hospital, can't drive anymore, get divorced, widowed- the list is endless. I know one lovely lady in her 70s who relied totally on her husband to drive her around to the shops, doctors, etc, and also on him speaking French, which even after 20 years she does not speak, apart from basic greetings. He died last year, and she is totally trapped. Can't sell, and if she does at a massively reduced price, could never buy again in SW London where she used to live and where her family is.

And many bought when exchange rate was better, but over-stretching themselves, and any fluctuation in exchange rate polished them off. The internet is choker with expats trying to sell. Several also used UK builders and materials to do up the house, only to find they can't sell due to regulations not being met re electrics and basic safety regs.
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  #115  
Old 29.01.2015, 10:13
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Re: Selling a cutie pie house but ...

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We bought last year, I.e, at the 'height' if it's to be believed, and I am still happy with the investment. it took us 18 months to find the house and I took a ten year mortgage with the full intention of remaining here for it. While house prices may correct in the coming years my outlook it on the 10 year timespan and I would think that by then my house should be worth at least as much as I bought it for.

There are so many other aspects to owning a home which are not directly financial though - doing it up (which is of course actually tax deductible so works as an investment in itself), breaking things without panicking because it's not yours, just a feeling of well being, that in the end I am happy we bought.
I'm not unhappy we bought, as our mortgage is pennies where I was paying silly rent. And we needed a roof over our head.

However, the house has not been a good investment in other respects.

Prices in our area for certain types of homes have fallen below even pre-bubble levels. If we had to sell today we might not get back what we paid for the house 11 years ago, let alone the 30% additional we put into rennovating it.

When all is said and done I do not see any tax advantage as I am a US citizen, and will likely take a hit when we sell as Uncle Sam sees it as a forex transaction as well.

We don't have to sell yet, thankfully. (And it would be insanity to put the house on the market when two others in the neighborhood have not sold.)


A question, though:

Thinking about what happens if we cannot sell after we leave... We are non-EU. Lex Köller only applies to foreigners who are non-resident at the time of purchase, oder? Can a now non-resident foreigner retain property bought while resident?

.

Last edited by meloncollie; 29.01.2015 at 11:14. Reason: Edited to add clarity
  #116  
Old 29.01.2015, 10:24
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Re: Selling a cutie pie house but ...

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I'm not unhappy we bought, as our mortgage is pennies where I was paying silly rent. And we needed a roof over our head.

However, the house has not been a good investment in other respects.

Prices in our area have fallen below even pre-bubble levels. If we had to sell today we likely wouldn't get back what we paid for the house 11 years ago, let alone the 30% additional we put into rennovating it.

When all is said and done I do not see any tax advantage as I am a US citizen, and will likely take a hit when we sell as Uncle Sam sees it as a forex transaction as well.

We don't have to sell yet, thankfully. (And it would be insanity to put the house on the market when two others in the neighborhood have not sold.)


A question, though:

Thinking about what happens if we cannot sell after we leave... We are non-EU. Lex Köller only applies to foreigners who are non-resident at the time of purchase, oder? Can a now non-resident foreigner retain property bought while resident?
Unfortunately (or fortunately) I am EU so the US tax part wouldn't apply, thats a real bugger by the sound of it. In terms of owning outside it's not something I have currently looked into as you say you can own from outside as a holiday home but not sure what the rules are around the situation you mention, sorry.
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  #117  
Old 29.01.2015, 10:47
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Re: Selling a cutie pie house but ...

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Thanks. That pretty much seems to agree with my comments above. Lake Geneva area down 6% in 2014.
That was also almost certainly written before the CHF Euro decoupling.
I think you did not read it properly. There are big drivers and minor drivers. If you confuse those two you end up never owning a home. Are you a home owner yet?

Some real consumer advise is also in the UBS report. I recommend reading it and thanks Mikers

Quote in the report
Someone who expects home prices to drop 10%
in three years should postpone a purchase as long
as long-term interest rates exceeding 2% are not
anticipated. Someone who anticipates prices falling
15% in the next three years while not believing
long-term interest rates will exceed 3% should
also wait to buy a home. If prices fall 20%, the
threshold for long-term interest rates is 5%. Whoever
expects prices to stagnate or rise, however,
should buy now.
  #118  
Old 29.01.2015, 10:51
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Re: Selling a cutie pie house but ...

Neddy, sorry you are going through this insane situation.

About 15 months ago, we were selling our house in the UK, and with hindsight, I think we went with the wrong agent. Should have signed up the local agent who was promising us the moon - there is something in a local agency who has a monopoly (almost) in your area!

It was more important for us to get the best (read lower, much lower than we anticipated) price and have a clean plate (i.e. no property in the UK to manage and rent). That decision made our first year in CH pretty much stress-free. Yes, we did not get as much as we could have, if we waited to find the right buyer, but being able to cut the financial ties with the property was worth it. Of course, our plans to become mortgage free were scuppered, but it is a small price (sort of) to pay for some sleep!

Good luck with your sale!
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