Dream of owning their own home: “The majority need inheritance help or financial help from the family.”

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Switzerland has the lowest home ownership rate in all of Europe. 64 percent of residents live in rent. Many want to change something in this regard. According to a survey conducted by Moneypark in the spring, two-thirds of renters dream of owning their own home. However, for most people this remains a dream. Property prices have risen much faster than wages over the last 20 years.

Many households fail anyway due to the equity required. If you want to buy a typical apartment for 900,000 francs, you need to bring with you at least 180,000 francs of your own money. Money that most don’t have. That is why the Economic Commission of the Council of States wants the federal government to help young families with financing by providing guarantees.

“Portability is the biggest problem”

Today, most home buyers already lack the necessary funds: “The majority of our mortgage clients who buy an apartment or house are dependent on inheritance advances or financial assistance from the family,” says James Kuhn (47), mortgage consultant at VZ Vermögenszentrum. Half of Moneypark’s mortgage borrowers also rely on financial support from their families, according to Dennis Eicker (34), Head of Partners and Products at Moneypark.

But two mortgage experts think the impact of the guarantees is low. “The much bigger issue is portability,” says Eicker. The calculation is simple. Let’s say a family buys a detached house for 1.1 million francs. If she has to take out a mortgage of 900,000 francs, she needs a household income of 160,000 francs to cover it. Or you should contribute more of your own money. That’s why equity is usually 30 or 35 percent of the purchase price. A small guarantee seems like just a drop in the ocean.

Construction land speculators are making the problem worse

“It would be more beneficial to take measures to reduce high prices. More needs to be built for this,” says Kuhn. It is considering reducing regulatory hurdles. “Today it usually takes three or four years from planning to approval.” This situation already scares many investors. After all, the market may have changed again during this time. Kuhn believes: “If this process can be shortened to one year, construction activity will increase significantly.” Even at higher usage rates the bid can be increased in the medium term.

Eicker also sees a great need for action on land prices: “Since the adoption of the spatial planning law, in many places we did not have enough building land,” says Eicker. In urban areas this can quickly reach a third or even more than half of the property price. Speculators also play their part.

“It is out of the question for owners to hoard construction land in central locations for long periods of time because they hope prices will continue to rise.” Eicker thinks communities have a duty. The spatial planning law will provide them with the necessary tools. A person who does not build within a certain period of time, for example ten years, must sell his land.

Source :Blick