Thursday , October 21 2021

Buying a house is a long way – saving


The dream of the house is over. At least two-thirds of the Swiss. They can no longer afford the rising prices of single-family homes. Although low mortgage rates make the purchase more attractive than ever, real estate market supply is not in demand. Prices continue to rise – even by almost 5 percent in single-family homes over the past year. "It's a big growth historically. Between 2013 and 2018, prices have risen by an average of 3 percent annually, "says Frances Schwartz, a real estate market analyst in Raiffeisen.

Those who want to fulfill their desire for their own home need not only wealth but above all a good income. Even those who apply the prescribed equity of at least 20 percent will not receive a mortgage for a long time. Because it may not meet the criteria for portability.

The monthly salary is crucial

This means that his income should be sufficient to finance the running costs of his home. As a rule, they should not exceed one-third of the monthly salary. Maintenance and additional costs are just one thing. Interest rate is considerable. Despite the record low mortgage rates, here banks expect a conditional interest rate of 4.5 to 5 percent. Would you sink, buying a home for more Swiss would be possible again.

The interest charged is determined by the banks. In 2017, then-Raiffeisen boss Patrick Giselle had plans to adjust the interest rate down to allow more families to buy a house. Conversely, Raiffeisen could have provided more mortgages. The Financial Market Authority (Finma) was not satisfied. In the mortgage business, the cooperative bank is in the lead and continues to increase its loan volume each year. In May, the total amount was CHF 190 billion – more than 6 billion more than in the same period of the previous year, as shown by the National Bank's banking statistics.

Mortgage rates are moving from one record to the next: the average 10-year mortgage rate is currently 1.1 percent. The 5 percent interest comes from a time when interest rates were higher, says Raiffeisen-Mann Schwartz. "One might ask whether it is still reasonable to expect such a high interest rate." However, this is generally a political issue.

Extracting and easing an element of accessibility requirements would meet the resistance of the business in the current environment, says Credit Suisse Real Estate Expert Freddie Hassenmail. "It may be worth considering reducing impulse interest in return for lower maximum interest rates."

There are good reasons why the 5% interest rate will not be adjusted: "If the impulse interest rate is lowered, the risk of market correction increases as soon as interest rates rise again," says Patrick Schnorff, real estate consultant at Wüest Partner.

The problem is simply delayed

The company is skeptical about lowering portability standards: Using impulsive interest serves as a safety buffer, says spokesman Winsen Matisse. UBS real estate analyst Claudio Saputeli sees a drop in interest rates only to offset the current problem: as the impulsive interest rate drops, more Swiss people can afford to buy their own homes, demand will increase and market supply will not be satisfied . Property prices will continue to rise. "If there is a rise in interest rates then," Saputeli says, "it is these households that will be asked to pay those who could afford to buy property by reducing the impulse rate."

Created: 16.08.2019, 21:09 Watch

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