In recent years, buying a home in Switzerland has been more expensive than renting, but this trend may be changing with the National Bank’s latest interest rate cut. Lower interest rates have made home ownership more appealing to many people, and as a result, there has been an increase in demand for condominiums. With interest rates having relaxed significantly over the past six months, it is believed that they will not rise in the near future.
The combination of lower interest rates and a tight rental market has led many in Switzerland to consider buying their own homes. While the number of advertised condominiums has increased in the past two years, there are still many used properties on the market that are priced high. These properties have longer selling times and contribute to an oversupply in the market. Despite this, transaction prices for condominiums have increased, with no signs of a trend reversal in 2023.
Since 2022, when interest rates turned around, home prices have consistently risen and made owning a home almost double at times. However, with the recent interest rate cut by SNB, it is possible that the cost of owning a home may once again become comparable to renting. Sellers are likely to hold firm on their asking prices if interest rates continue to decrease, which may increase buyers’ willingness to pay and resurgence in the housing market.
Overall, while buying a home in Switzerland remains expensive compared to renting, lower interest rates combined with a tight rental market have made it more appealing for some people. As interest rates continue to relax and sellers hold firm on their asking prices, buyers may be willing to pay more for their dream homes.
