Over the past two years, buying a home has been more expensive than renting, but this trend may be changing. The National Bank recently lowered interest rates again, leading to an increase in demand for condominiums. This is evident from the 7 percent increase in search subscriptions since the middle of last year, according to consulting firm Wüest Partner (WP).
The relaxed interest rate situation over the past six months has played a significant role in this increase in interest. After a series of interest rate increases, the Swiss National Bank made a “zero decision” for the first time in September, followed by another rate cut in March. This has led to a decrease in mortgage interest rates, making home ownership more attractive.
Another factor contributing to the renewed interest in home ownership is the competitive rental housing market. With many people finding it difficult to find affordable rental properties, buying a home has become an attractive option. However, high property prices have also made it challenging for potential buyers to make a purchase.
Despite this shift in market conditions, property prices have continued to rise. Condominium prices increased by 3 percent last year and are expected to rise further this year. While owning a home can be expensive at times, with recent interest rate cuts, it may once again become more affordable than renting.
This change in market dynamics has led sellers to hold firm on their asking prices as buyers may soon find it more affordable to buy than rent. With the possibility of further interest rate cuts, there may be a shift back towards home ownership once again.
In conclusion, buying a home has become increasingly attractive due to lower mortgage interest rates and competition from the rental housing market. Despite rising property prices and potential limitations on affordability, with recent interest rate cuts and future prospects of further cuts; owning a home may once again become an appealing option for many individuals looking for long-term stability and investment opportunities.