Quite why anybody would lend money for less than a 1-2% premium over inflation beats me.

In our little village, old houses owned by grannies and grandpas were quickly bought, razed to the ground, and a lovely Einfamilienhaus would be built in no time. But not anymore. The law on “Verdichtung” - densification of urban (and rural) spaces has seen these big plots converted into smaller ones - pokey houses with pokey gardens. An “old” house (only 50 years old) with a big garden has just been sold down the road. It will make way for 1 detached home and 4 semi-detached houses! A friend spoke to the developer to ask why were they building so many houses in that small space. The answer was it was a condition to get the permit. So if you have a good sized garden, hold on to it!

That's where politics of the Gemainde/community get's in the way. Vote for people that have different idea than just get more prople in with small affordable homes to get taxes off them to support ever growing expenses of communities .

Problem like that one is solved easly by ratio of "green land"vs "m2 unusable" which is just another way of making sure there is X*m2 garten per every m2 of the living space.

anecdotal evidence about house bidding and rising prices from 20min today:
https://www.20min.ch/story/viele-koe...n-802830624048

Not only the prices have increased....but there aren't that many houses on sale to speak of!! In ZH city, that is. If you're willing to commute things appear to be a tad better.

This is not a Swiss phenomenon, but a global/pandemic driven one. Switzerland is at place 15 on the overheated market index, with countries like New Zealand, Canada and Sweden topping the list..(places with the best Wilderness meets WiFi ).

I would say Switzerland is only lower down the list because, as previously mentioned, the ability and willingness to pay have not gone up so much, as well as the difficulty to be speculative (ie house flipping).

I've got relatives in Montana who are shocked at the spike in prices for housing.

I wonder what the appreciation would be on a 5.5 room terrace house bought in Dec 15 in Altstetten would be?

You can probably get an estimate through this tool and then comparing it to the price from Dec.

https://en.comparis.ch/immobilien/im...4-02cb63d0ed46

Whoa, beware this website. I was just looking and realized that I’m looking at some personal details of an EF member.

I grew up in a Swiss (canton Zurich, near Zug) village where pretty much everyone lived in their own house, most of which belonged to their parents. The friends of my younger siblings are starting to have kids and have set their hearts on replicating their own childhoods by buying a house with a garden, just like they had. Unfortunately, despite the village having roughly doubled in population and footprint, there are simply no houses available for purchase. The same applies in all the neighbouring village, even renting one is hard, more so if you cannot afford to pay the minimum 3 grand rent they tend to cost.

These young parents enjoyed their twenties and travelled, so they have also not managed to save the upwards of 200k down payment you need to buy pretty much any type of property within a 30 minute drive from Zurich if you do happen to find one. Before embarking on their search they probably asked their parents what they paid for their houses back in the eighties / early nineties and were given figures of around 400 - 600 k depending on the size of the house. Back then, there was no motorway connection nearby, the buses only ran every hour and interest rates on mortgages were much higher. The current prices must have come as quite the shock to them...

So unless they plan to move to a much more remote spot than where they grew up, they will have to rethink this particular life goal. To be honest, I don't think I would want my kids to grow up in an apartment either, simply because either one is permanently stressed trying to get noisy children to be less so or the neighbours are stressed because of the noise. Either way, someone loses. A ground floor place would probably work out better but even then, I can confirm that noise and vibrations travel upwards as well as down.

The whole corona thing really highlighted the limitations of apartment life, which has increased the demand in having your own place where you can make your own rules. Those who want to stay in an apartment (or have resigned themselves to this being the only option) are typically trying to find a place with an additional room.

Not mine. Just a hypothetical one for Altstetten

This , and if indeed it means people moving out of cities and rediscovery the joys of rural or at least suburban living , that should be supported by a drop in prices in inner cities which is not something I am aware of

Or a drop in rents for that matter . Remember rents and purchase values correlate

Whereas the stock market has been doing many times that and was up 20 to 30 percent in 2020 alone .

People putting money into bricks and mortar is more a bear market phenomenon .

Personally I am more of the opinion that during market downturns and stormy periods it’s good to have cash in hand so you can jump on opportunities .

…but shares are not a home.

But they can pay for one when the time comes .

Can't really compare though.

I've bought and sold 2 properties in Switzerland and currently holding my third and fourth. Average rate of return from my initial investment over 18 years is about 20% per annum. I have not counted interest payments, but as it is a lot less then the rent I would have had to pay, I had more free cash to invest in the stock market too.

But a huge but... investing in property is very different because most people use leverage - I paid 15% of the first property and borrowed the rest. A lot of people like me would borrow to buy property but would never borrow at similar levels to invest in the stock market though.

and as abFab said, I think this thread is about buying a home, not investing in property. I got decent returns from my property investment, but all I have is a nice place to live in.

I take it that 20% compound gearing was based on 6 2/3 times gearing so about 3% compound on the asset that seams reasonable. 18 years ago the interest rate would have exceeded 3%, Post Finance was paying 2.5% interest in those days.

20 percent per annum sounds very good and I don’t think most people are doing anything near that . The clue is often in the fact that the bank lends you money and leaves you to manage the risk. The bank will only to a far lesser degree take the money and buy the property itself to then rent it to you . Working from the assumption that banks know more about money than the rest of us and don’t give stuff away for free, this is my first red flag .

Disclaimer here that I own or co own two properties myself but neither of them is my primary residence and neither is in CH although I did use a CHF credit to finance and renovate one , but have since repaid it . The prices and thus also the risk and commitment were much lower than in CH though whereas the value appreciation has been much higher.

I had three at one point but sold the third one at the end of 2019 , which turned out to be a fortuitous piece of luck as it would be much more difficult to do now under Covid

In my view, if you want to get onto the property ladder as a young family with an average income, Canton Zug is probably not the best place to start. That's more the sort of place you move to when you start earning so much that you your tax savings offset the higher value of the property.

You can still find relatively affordable houses in parts of Aargau and even the Züri Oberland. You don't need to stump up those 200k from your savings account because there are other ways, such as pledging your pension fund or even having your parents chip in. I'm seeing lots of houses being bought by families with young kids and parents who I assume are not top earners.

Personally I wouldn't do it. For reasons I explained previously. But I think for people to whom it matters, there is generally a way.