Buying Swiss property set to become better value than renting (2024)

Buying Swiss property set to become better value than renting (1)

Falling mortgage rates and rising rents could lead to a situation favouring buyers by early 2025, a UBS study predicts.

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  • 日本語

    ja

    スイスでマイホームが賃貸よりお得に

    Read more: スイスでマイホームが賃貸よりお得に

  • 中文

    zh

    在瑞士买房比租房更划算

    Read more: 在瑞士买房比租房更划算

According to the bank’s study, published on Monday, property buyers currently face higher financial burdens than tenants of a similar property. Annual costs for a four-and-a-half-room owner-occupied flat with 110 square metres of living space were some CHF32,500 ($36,238) in the first quarter of 2024, while the annual rent for such a flat was CHF30,500 – a property mark-up of 7%.

In the summer of 2023, this surcharge was 16%. According to current forecasts, a person who took out a long-term mortgage at that time would have to bear additional costs totalling almost CHF50,000 by 2033.

+ Golden cages and rising rates on the Swiss housing market

But thanks to the fall in mortgage interest rates, the property premium is now significantly lower than in summer 2023. And by the beginning of 2025, it should fall by 3%, UBS says.

The main drivers of this trend are the two key interest rate cuts still expected from the Swiss National Bank (SNB).

The fall in the property premium is widespread in Swiss regions. In cantons Bern, Solothurn, Aargau, Schaffhausen and Thurgau, it is already below 5% in many places. In some parts of the cantons of Vaud, Fribourg and Valais, buying a home is already cheaper than renting. On the other hand, mountain regions have the highest property premium.

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Buying Swiss property set to become better value than renting (2024)

FAQs

Why is buying a house more beneficial than renting responses? ›

Buying a home allows you to build equity over time. Unlike renting, where your monthly payments go toward the landlord's investment, each mortgage payment contributes to your ownership stake in the property. Over the years, this can result in significant equity that can be tapped into for future financial needs.

Which factor would make it better to buy a property instead of renting it? ›

Renting offers flexibility, minimal maintenance responsibilities, and the absence of property taxes but lacks the potential for building equity. On the other hand, buying a home allows one to accumulate equity, enjoy stability, and benefit from tax deductions.

Is buying property in Switzerland a good investment? ›

Investing in real estate in Switzerland is therefore particularly worthwhile if you have a long-term investment horizon. Swiss real estate is one of the investment forms that offer a high degree of inflation protection. Returns are generated through both rental income and capital appreciation.

How is buying better than renting? ›

Tax Benefits: You might receive tax benefits from buying or selling a home, depending on your personal financial situation. Stability: Your family can create more stability in the community you live in when you buy because you know that you can continue living there as long as you can make your mortgage payments.

What are three benefits of owning instead of renting? ›

The benefits of owning a home instead of renting offer buyers several tax advantages, the ability to grow equity, and of course a place to call your own. It's also a feel-good milestone that offers a sense of pride and accomplishment.

Is it better to rent or buy in today's economy? ›

Long-term renting is currently cheaper than homeownership in 46 of the 97 major cities we researched. 69% of renters believe that renting is the best financial decision for them right now. Renters will spend an average of $1.26 million over the course of 30 years while homeowners will spend $1.30 million.

What is the 5 percent rule in rent vs buy? ›

Take the value of the home you are considering, multiply it by 5%, and divide by 12 months. If you can rent for less than that, renting may be a sensible financial decision. For example, you could estimate about $25,000 in annual, unrecoverable costs for a $500,000 home, or $2,083 per month. It goes the other way, too.

In which scenario is it better to buy a property than to rent? ›

If you and your family do not plan to stay where you are longer than 3 years, you would be better off renting for now according to most experts. If you are not sure, the pointer still leans toward renting. If you are committed to at least 3 to 5 years or more, it's probably in your interest to look into buying.

Why the rich are renting instead of buying? ›

Renting relieves you of paying for the maintenance, insurance, property taxes, and other costs of owning a home. If you're a high-net-worth individual who splits their time across different properties, you probably don't want to spend time dealing with the headaches that come with ownership.

What is the safest investment in Switzerland? ›

In practice, this means that bonds, precious metals or real estate are considered to be safer forms of investment. Based on the amount of your total assets, you decide in how many different “safety components” you invest your money.

What is the downside of living in Switzerland? ›

While there are numerous benefits to living in Switzerland, there are also some drawbacks to consider: High Cost of Living: As mentioned earlier, the cost of living in Switzerland is considerably high. This extends beyond just housing and includes groceries, dining, and general entertainment.

Where is the best place to buy a house in Switzerland? ›

Geneva and Zurich, the two most vibrant cities in the country, perhaps have a premium price property market, but they also offer a very good standard of living. They were also in the Top 10 of the Mercer International Ranking for quality of living in 2019.

What factors would make people want to purchase a home rather than rent? ›

Renting offers flexibility, predictable monthly expenses, and someone to handle repairs. Homeownership brings intangible benefits, such as a sense of stability and pride of ownership, along with the tangible ones of tax deductions and equity.

What are the disadvantages of buying instead of renting? ›

Drawbacks to buying
  • Maintenance is your responsibility.
  • Relocation is more difficult.
  • Mortgage payments may be higher than rent.
  • Home value may not increase, especially at first.

Which builds equity, renting or buying? ›

Most everyone knows the advantages of buying over renting: Equity that builds over time. A safeguard against inflation. Tax-deductible mortgage payments.

What is the advantage of buying the house over renting the? ›

Renting offers flexibility, predictable monthly expenses, and someone to handle repairs. Homeownership brings intangible benefits, such as a sense of stability and pride of ownership, along with the tangible ones of tax deductions and equity.

Why is buying a house more beneficial than renting Quizlet? ›

Buying is a personal investment while renting involves giving money to the landlord. Which is one advantage of owning a home compared to renting a place to live? Monthly mortgage payments are generally less than rent.

What is a benefit of buying a home rather than renting Quizlet? ›

No lease restrictions, cheaper long-term, a home can appreciate in value, home ownership offers tax benefits.

Why is buying a house more beneficial than renting brainly? ›

Owning a house is more beneficial than renting because it builds equity over time. It is a form of investment, with financial and non-financial returns.

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