Solutions and possible obstacles: Things can still work this way in your own home

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For many young families, the dream of owning their own home is over. In much of Switzerland, prices are so high that people in their 30s and 40s can no longer afford them.

For example, in the canton of Zurich, the price of houses is now a quarter higher than in 2018. This is shown by an analysis from Zürcher Kantonalbank (ZKB). Prices in the city of Zurich have increased by 35 percent since 2018. This has led to more than a quarter of the detached houses in the city now costing over 3 million francs; In miles, this figure is even more than a third.

Problem: “Incomes are not growing nearly as much as house prices,” says Ursina Kubli (43), senior real estate expert at ZKB.

Solution with capture

Although prices in Zurich are among the highest in Switzerland, rising house prices are also causing problems in many other parts of Switzerland. That’s why there are always calls for new solutions; such as less stringent affordability rules. When it comes to home financing, banks always impose a requirement that home buyers be able to bear the 5 percent interest cost, even if current mortgage costs are significantly lower.

It is said that if the interest rate is reduced, more young families will be able to buy a house. Is this true? According to ZKB calculations, the elderly generation will especially benefit from the reduction in the comparable interest rate. “Lack of equity is a big problem for young buyers,” says Kubli. If the benchmark interest rate falls, nothing changes.

State guarantee for young people

Another much-discussed measure is the “Start-Up Assistance Initiative” of the homeowners association HEV. This aims to make homeownership possible again for a wider population, thanks to government funding. It stipulates that the canton must guarantee up to 15 percent of the equity capital. Interested parties will then need to bring in only 5 percent equity capital instead of 20 percent. But this initiative also has a problem: A higher loan-to-value ratio requires a higher income.

“The guarantee will especially benefit young families who do not yet have much savings but can prove that their salaries are high,” says Kubli. These include, for example, doctors or lawyers who start their careers with an attractive salary after a long training period. “This is not a solution for the general public either,” says Kubli.

More condominiums

The real estate expert has a third suggestion: “If we want to increase the ownership rate in Switzerland, we need more apartments,” says Kubli. According to ZKB’s analysis, the introduction of condominiums was the biggest gateway to home ownership. Because it’s much more affordable than a single-family home.

However, there is a disadvantage here: Even though the search for solutions for affordable home ownership is urgent, the main reason, namely the structural insufficiency in housing, cannot be solved in this way. “More apartments would be desirable, but that would have to be built first,” says Kubli.

Source : Blick