Of course that happens only if your collateral requirements are not met anymore. But it does happen and it happened, 40 years ago it happened a lot.
I think the Raiffeisen Bank in Degersheim was such a case. The bank just kept the house, I think it was a butcher shop before. The old owner got out with debt and without a house…
Interesting enough that I cannot find any hints in the internet to this history, maybe I’m wrong, was a long time ago…
The total returns of Swiss residential properties are nowhere near the total returns of equities. For example, over the ~50 years since 1970s the average real compound annual return of Swiss houses has been 0.9%.
That helps with the FOMO, thanks 
But it’s 0.9%, right? (1.009^50~1.57). Also this is just the market value increase, not considering rental income, right?
I wonder where the Economist has the data from. The official CH numbers I could find start at 2017. Does anyone have a good source for a longer period of time? The UBS Global Investment
Returns Yearbook 2025 says 6.6% real total annual return for US equities since 1900, but unfortunately doesn’t provide numbers for real estate.
Yes, you are right, I accidentally added an extra 0. Still, 0.9% isn’t much.
Yes, it’s capital gain part without yield part of the asset.
Their sources are national statistics and OECD data. Here is the index data https://fred.stlouisfed.org/series/QCHN628BIS and if you combine it with consumer price index Consumer Price Index: All Items: Total for Switzerland (CHECPALTT01IXNBM) | FRED | St. Louis Fed you should get the same data as The Economist
@distantranges Thank you very much for those links! I checked the data (and probably made some mistakes): I get 1.3% annualized real return (capital gain only). Allowed net yield in CH is currently 1.25 + 2 = 3.25 %. But only on the owners equity without mortgage, so the yield cannot be leveraged, if I understand this correctly.
Makes it rather difficult to compare.
I like to look at this from a cash flow perspective.
My portfolio generates the cash flow (that I can live off now). The cash flow grows every year without me doing much. The portfolio also grows in value without me doing anything.
Real estate with a mortage absorbs cash flow. Cash flow that I need to generate with something else (usually human capital).
Nuance to your liquidity point:
If I want to buy something beyond the cash flow generated by my portfolio, I can sell just part of my portfolio and T+2 (at the latest), the cash flows into the bank account.
If I want to buy something with my leveraged real estate … um, well, I don’t know. I suppose if the real estate is not maximally leveraged, I can take out another mortgage (though not sure how easy this is in CH)?
RE with mortgage creates indirect cash flow, my mortgage cost is 3x less compared to what I would pay in rent.
Even in Switzerland you can always remortgage your property and take out cash if you have enough equity to bring it again at 80%
Looks correct to me. I found an index for real returns of residential properties Real Residential Property Prices for Switzerland (QCHR628BIS) | FRED | St. Louis Fed, it gives the same annualized real return. The returns based on The Economist data are lower because their data extends only up to Q4 2017 and between 2017 and 2022 the residential property had very high above average returns. Plus The Economist data is for houses only which historically had lower returns than the residential property in aggregate - between 1970 and 2017 houses index has increased by 59% in real value while residential property index has increased by 70%.
Based on Immoscout data, over the last 3 years the gross rental yields have averaged ~3%. But I don’t know what is the long-term average rental yield. But when comparing to the yields of equities, you need to subtract from the RE yield maintenance costs which is usually between 0.5 and 1% and the mortgage interest which averaged around 1.5% in the last 17 years https://en.comparis.ch/hypotheken/zinssatz/zinsentwicklung (I don’t have data longer than that, but based on the historical rates set by SNB I assume that the long term value would be higher than 1.5%). So, you would need to subtract ~2% from the gross yield of ~3%.
Great for you!
I am not saying you shouldn’t look at mortgage cost vs saving in rental cost and what suits your specitific situation. In fact, it should be part of the overall cash flow calculation (which maybe was your point in the first place and I just missed it?).
Anyway, I’m just saying that you can look at the OP question also from a cash flow angle to answer for yourself specifically which approach (or mix of approaches) suits you best.
At the end of the day, IMO, you live your life through cash flows in and cash flows out, not total return of (potentially leveraged) capital gains in X years. YMMV, of course.
To face the potential FOMO painted by the OP, I thus compare myself to myself specifically:
the property we rent is valued about CHF 3M (essentially determined by the land price)
my (securities) portfolio is valued about the same (or slightly more) as the value of the property
remaining income from human capital was about 120k or so in 2024, dropping to about 70k or so starting in 2025
If it was available and we wanted to buy the property we live in, there’s all kind of calculations that can be made: what amount to pay down, how much cash flow is saved in rent, how much cash flow is spent on the mortgage, how much cash flow is spent on maintenance & insurance, how much is cash flow reduced from the slashed portfolio, what does the bank consider as “reliable” income and is that enough to cover the theoretical 5% of financing the mortage, what kind of cash flow do I need for the living standard we want, what amount of down payment to potentially finance from pillar II, what that means for reduced cash flow at the time of withdrawal of pilllar II, etc etc.
In practice, for me specifically, after eyeballing the cash flow numbers I conclude that I want to continue renting.
Kind of what I thought.
My point was more on being able to generate the cash wanted with a market traded portfolio within days, and regardless of time after initial down payment and equity available, versus re-mortgaging again at some later point in time after – I imagine – at least weeks (if not months?) of (re-) negotiations with banks.
So probably about one percent. What are current mortgage rates again?
Yikes.
Did I already mention that I love our landlords? May they live forever or at least as long as we rent. 
This data is misleading as it only focuses on capital gains. But at same time this makes total sense. RE should follow inflation over long term because inflation drives wages and wages drive affordability and affordability is needed to buy properties.
Intuitively also it makes sense. A major part of cost of living is housing in most countries and also in Switzerland. So RE prices should more or less move with inflation.
Perhaps better to compare SWIIT TR vs SPI TR.
Cool, thanks!
I found this Raiffeisen “real estate studies” archive via this Cash article. The 1Q 2024 report says:
That would suggest that a reasonably well leveraged and managed real-estate investment is roughly comparable with a non-leveraged ETF strategy (not taking into account softer factors like stress, time etc.).
Yep, and the court decision about maximum allowed net yield suggests that the upper limit is currently 3.25% for net, and 5.5% for gross yield (irrespective of mortgage).
Yes, I am looking for angles that help with the FOMO. And every angle helps, thank you.
Sounds indeed like an amazing deal 
Well done.
Honestly, I don’t understand RE FOMO. You have a lot of hassle and modest returns. Bitcoin FOMO, I could understand.
Just for curiosity. What is your old and new mortgage rate and what is your margin rate at IB?
Still waiting for the new rate, the old is 1.05% margin on a Saron which results in 1.49% total. The IB rates are here (type in CHF and the amount, already did provide the link):
Interesting, the benchmark is only 0.215% on CHF at IB at the moment.
