7 posts were merged into an existing topic: Longterm investment returns in various markets
You are probably the only one complaining about it 
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Very funny. If I’m the only one complaining then I guess the rest just doesn’t understand 
. Do you prefer to send countless applications over many months in the hope of being selected, or would you rather know that if you apply, there is 50% chance you will get it? When I go to a shop, I’d rather it be fully stocked and I don’t have to be friends with the cashier to be able to buy groceries.
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would this come at the price of many not being able to afford rent?
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Considering that lodging can easily cost 20-30% of the household income, it is funny to read it in a forum where people discuss which supermarket is cheaper and if it is worth to go abroad to buy groceries. I have no problem “overpaying” like 100 CHF per month by going to the nearest Migros to buy food instead of hunting for the cheapest groceries. But I also think that 95% of households cannot afford just take any lodging that suits them no matter the price.
If you want to rent twice more expensive than market prices, I am sure you can find something very easy. Or live permanently in a hotel/pension/Airbnb. If I would have lots of money and no children, I might have actually considered this.
ok I agree
Last time I checked, in the long run the S&P 500 yielded 10% nominal return in USD and SPI yielded 8% nominal in CHF. Adjusted for inflation, both would probably sit close to 7% real return. But ok, maybe if you count the net, after tax income, then it goes down.
But let’s not get sidelined by this one number.
What I think we can agree on, is that over the last 50-70 years, our productivity has grown, but our purchasing power of real estate has shrunk. Yes, it is possible to get a mortgage at the low interest rate not seen in the past, but still, you have to carry this burden of owing many times your annual savings and eventually pay it off. It just seems broken to me and I wonder what exactly causes it and where’s the fix.
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If rental ads disappear after a couple of days due to high demand, then I don’t think these people are at the limit of what they can afford. If there’s a flat going for 2’500, maybe I would be willing to pay 3’000 for it. But I don’t even get the chance to bid. Is that not obvious? If hundreds of people apply in a day, it’s a clear sign that the price is too low.
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Let’s not talk about your feelings but about the observable facts. Applying for a flat in Switzerland (at least in the Zurich area) is difficult. Most of the time you don’t get a reply. Hundreds of people are willing to pay the price that is advertised. So I wonder why this price isn’t higher. Just looking for a straight answer.
Because it’s a regulated market.
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Well, we’re getting somewhere. But can you point me to a source where I can read up on that? Like, how is a pension fund or an insurance company restricted in setting the rent height on the property that they own?
Aren’t these socialist policies slowing down further real estate development? If you can’t set the rent freely, maybe you will think twice before you invest.
I meant this one
But I agree, we should stop here.
Productivity has nothing to do with the real estate. There are more people on earth and, I don’t have numbers at hand, but from what I remember, the lodging area occupied per person keeps increasing and increasing.
(Did we have this discussion few years ago already?).
Even during the last 50 years or so; in 19th - early 20th century it was rather common in cities that a multigenerational family would occupy one room. So we can say that unlike all other resources, living space is getting less and less available. So you shouldn’t be surprised that our Lord the Market makes it expensive!
Of course there are areas with a huge demand and those with a moderate one. Even in Switzerland, you can buy or rent lodging at very affordable prices in small villages of Canton Jura. But that’s not what you are looking at.
That might be true, but the same property also costs more than it did in the past.
Just out of curiosity, did you see any attractive real estate there? I mean like, not very old, not in need of big renovation.
I think this is a subjective and political matter and discussion of these is not welcome in this forum. You are also oversimplifying here. Calling the policies socialist, seems judgemental.
For information see:
https://www.mieterverband.ch/mv/mietrecht-beratung/ratgeber-mietrecht/top-themen/anfangsmietzins.html
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15 new posts and nothing regarding the topic lol.
Fair point, I just couldn’t help myself I won’t mention it again.
Correct me if I’m wrong, but is it not fair to look at the price of real estate in the place where you live and work? What good is a flat in Jura if you work in Zurich? A couple living in Zurich, each earning 120k (240k in total), could afford a mortgage of 1m. They would probably need to get married first, or just trust each other enough to go into a business deal of their lifetime together. Being good earners, they could pull their pension money and savings and collect 500k. So they could afford a 1.5m flat in Zurich. Last I checked, this is barely enough to afford anything nice. If they were looking for a house for that money within the boundaries of canton Zurich, they would be choosing from scraps. I just find it a frustrating reality and I wonder if there is a way out.
YES. And I explicitly asked not to write anything more about it. I don’t want to have to clean up this thread. Just please let’s focus on real estate.
Regards interest rates. SNB rate 1.5% is below the target inflation rate (2%). I’m no expert but that doesn’t feel very restrictive
Regards real estate. Rents will increase (due to salary inflation, increased demand from people who can no longer afford to buy at current prices, higher reference interest rate for rental controls).
I assume real estate prices may stagnate / decline, and therefore that rental yields will increase
I guess SNB has a really delicate job on their hands now regards the housing market (imagine if noise starts about UBS’ mortgage assets… )
Do say more! I was not happy about that merger deal betwen CS and UBS. Just creating a bigger problem, kicking the can down the road. Is UBS big in mortgage business? I always thought the biggest players are SwissLife, maybe Raiffeisen?
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It also made me thinking about long-term effects for this on Switzerland. Not to be off-topic - I think Switzerland can lose a lot of its “charm” as regards banking safe heaven etc., which may affect high-earners/wealthy people immigration, which finally may affect housing market, amongst other things. Hopefully I’m too pessimistic here, as CHF doesn’t seem to be particularly weak after what happened…
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What we saw last week was that once a run starts there is no stopping it even if depositor’s initial fears were not rational
Even if it not the biggest mortgage lender any noise about UBS’ Balance Sheet seems something to avoid at all costs right now. UBS is twice the size of the Swiss economy and maybe too big to be saved (does anyone really know yet?)
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