Buying will soon be cheaper than renting again
Falling mortgage rates and rising rents are making buying your own home even more attractive. Whilst renting was financially slightly more advantageous in some places during the period of high interest rates, a study by UBS suggests that buying will soon be the cheaper option again.
Buying or renting? When it comes to housing, this question is on the minds of many people in this country. The key issue here is which of the two options has a greater financial impact – or, in other words, which is cheaper. Until recently, homebuyers still had to shoulder a slightly heavier financial burden than tenants. However, falling mortgage interest rates are creating a new dynamic – in favour of home ownership. Added to this is the fact that rents are rising due to the shortage of available rental properties.
Home ownership more attractive than a year ago
Currently, the annual costs for an average four-and-a-half-room flat with 110 square metres of living space amount to 32,500 Swiss francs. This is according to a study published by UBS this summer. The annual rent for such a flat costs 30,500 Swiss francs. This results in a cost premium for home ownership of 7 per cent. However, thanks to lower mortgage interest rates, the cost premium is now significantly lower than it was in the summer of 2023, when the picture was quite different, according to UBS. At that time, the cost premium stood at 16 per cent.
Home ownership becoming more affordable in many regions
According to UBS, the current decline in the home ownership premium is widespread across the regions. In the cantons of Bern, Solothurn, Aargau, Schaffhausen and Thurgau, it is already below 5 per cent in many places, and in some regions of the cantons of Vaud, Fribourg and Valais, there is already a ‘home-ownership discount’ again – meaning that buying is once more cheaper than renting in those areas. According to UBS, the premium that currently still exists in many places is likely to reverse into a discount of 3 per cent by early 2025.
Now is the right time to buy a home
The falling property premium is likely to cause demand for homes – and thus prices – to rise gradually once more. “This means that now is an ideal time to turn what may have been a long-held dream of owning a home into reality,” explains Thomas Graf, an experienced estate agent from Bern. At the same time, he emphasises: “Every property is unique and a significant asset. For a successful property purchase, it is therefore worth relying on the utmost care and professionalism.”
Property and financial services from a single source
The experienced property team at thomasgraf ag will be happy to provide you with personalised, expert advice on home ownership – whether it’s a flat or a detached house. This established property service provider also offers an exciting selection of attractive properties for sale in both categories. thomasgraf ag is a certified member of the Swiss Chamber of Estate Agents (SMK) and will also support you in the sale of a property – providing a personalised service that meets the highest quality standards. Thanks to thomasgraf ag’s close cooperation with the asset manager and family office service provider TRIONINVEST, as well as the financial services provider hypolino ag, we offer you combined property-specific and financial expertise, many years of industry experience and a strong network.