Those who have some money on the side and earn a reasonable amount of money do the math every now and then to see if buying an apartment or home would be worthwhile or sustainable. Many people dream of owning their own home – according to surveys, every third inhabitant of Switzerland plans to buy a house or an apartment in the next ten years. Now would be the ideal time. Despite the slight increase in interest rates in recent months, mortgage rates are still at historically low levels. Libor mortgages, which are tied to the three-month money market rate, are available from as little as 0.6 percent. So the consideration is actually to buy a home instead of transferring a rent each month.
Life situation is decisive
Sometimes headlines like "Swiss remain a nation of renters" read as if this fact were a flaw. The housing situation is part of your lifestyle and depends on the phase of life you are currently in. Why should a young couple buy an apartment when it is not yet clear where their professional journey will take them?? For example, the high rate of relocation shows that the Swiss often change their place of residence – nearly 400,000 households moved within Switzerland from August 2016 to July 2017, as confirmed by an analysis of forwarding orders received by Swiss Post. Compared to 2014, housing starts increased by six percent.
Who rents, remains flexible and can for example with a job change fast the domicile change. Buying a home or apartment then tends to fall later in the life cycle. Because who buys, becomes immobile, as it shows the Latin origin word "im-mobilis", which stands for immobile. When you start a family, the need for home ownership increases and with it the willingness to settle down – especially when the children start school.
As you start a family, the need for homeownership increases, and so does your willingness to become more settled – even more so when your children start school.
Calculate correctly
With these low interest rates, one must buy, one often hears. But although the mortgage interest rates are temptingly low, it is worthwhile to calculate carefully. As interest rates have fallen, property prices have also risen in recent years. In the cities of Zurich, Basel or Lausanne, the prices of condominiums have increased 50 percent or more in ten years. Nationwide, real estate has increased in price by one-fifth since 2010. Purchase prices have risen faster than rents. Seen in this light, buying a house is not necessarily better than renting. It must also be taken into account that the invested capital cannot be invested profitably. And not to be underestimated are the ancillary costs and the tax disadvantages that property owners can face in the low-interest environment. Whether buying or renting is financially more advantageous in a specific case depends, of course, on the amount of the rent or the purchase price, respectively.
Nowadays, flexibility is also an important prerequisite in professional life – and a rental agreement is terminated much faster than a property is sold and the mortgages dissolved.
More mobility, less responsibility
Flexibility is also an important requirement in professional life these days – and a lease is terminated much faster than a property is sold and the mortgages dissolved. So for many planning a career, renting is the right thing to do, even if income and assets would be sufficient to build or buy. In addition, no capital is required, maintenance costs are borne by the landlord and no imputed rental value has to be taxed. And flexibility is also an advantage if the life situation changes unexpectedly, for example due to a birth, a divorce, the children moving away, a death or a layoff.
Thus, the decision to buy an apartment or a house is not only a decision of money, but also depends on other factors. The fact is that the Swiss are still a nation of renters. Only 40 percent of households live in their own apartment or house. In Germany, renters are in the minority; in France, England, or even the U.S., the ratio is well over half. Switzerland as a tenant country seems to remain one – at least for the time being