and then you see your dream house for sale. The catch: it costs 2.9M.
I struggled to get over the 1M barrier when buying my home. I can’t fathom paying 3M for a house to live in.
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How far back would those 2.9M take your early retirement date?
Zero. Because there’s no way I’d buy something like that unless I suddenly won 20M in the lottery! 
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Now imagine having two jobs and a kid, and not wanting to retire early but maybe just have a place to call your “own”.
An apartment perhaps less than 1hr commute from your non-IT job… and still cannot afford the 1mn needed 
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It doesn’t cost 2.9 M, they want 2.9 M - little but relevant difference in my opinion.
I am always wondering, there cannot be that many people who can afford all these houses over 1.5 MCHF which I see on sale. But houses stay rarely on the market for long, so I am always wondering what the sales prices was in the end. Or am I just wrong and there are so many rich people. Questions over questions.
I think there are quite a few given the number of such expensive houses I’ve seen. More maybe they were more reasonable a few years ago, and the prices in certain neighbourhoods just shot up?
Yeah but someone on the other side is affording it. I mean at this point the price is just arbitrary and has nothing to do with construction costs or land costs. It is about how much someone is ready to pay for it.
I guess it just can’t get in my head that so many people are really able to afford 1.5 MCHF for their living space without taking a substantial risk.
who says they are not.
I know people who put liquidated everything to buy a house and live paycheck to paycheck.
plus. I think there are plenty of wealthy people.
Just think how many work in Pharma or Banking. (I guess in recent year add on Big Tech too)
And if you’ve been working for 25 years in these industries, you will have accumulated a huge amount.
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Yeah, from their jobs, bonuses, RSUs; not investing, most certainly not passive investing.
I’ve come to think of saving and investing a “good thing to do”, but also not kidding myself that it’s a path to becoming rich. I know a handful of rich people (talking about 5-15mn figures - filthy rich for 99.9% of the population of the planet, but in the sea of filthy rich fish they’d not pass the threshold of even be called a fish) and only 1 did it through what one would call investing (and it involved big risks and huge leverage, as it’d be expected).
Given this thought has been buzzing in my head for more than a year now I should maybe make a captain obvious post about it in the coffee section and expand on it, just for the sake of it.
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I have a friend with 8 figure wealth (earned) - the funny thing is he is reasonably frugal and worries more about money than I do. Even though his passive income streams cover his living costs many times over.
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There are people like that, it’s probably a combination of knowing what it takes (from you) to get to 8 figures (so some PTSD), being mortified about being cast down to live with the plebs and worry about bills and expenses and your boss again.
I’ll make the post over the weekend, it’s long overdue to make a long rambling, quasi-philosophical post here 
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I am assuming that they go out of the market fast, then they sold for at least the asking price?
Slightly off-topic question:
When the various real estate indices (UBS etc.) say that house prices in Switzerland have increased by x%, does it imply prices of existing houses have increased by x% (on average) or does it include sale price of newer expensive houses? the latter would imply that prices of existing housing pool might not be increasing with the headline rate?
Actually, 2/3 of house ownership in Switzerland is by big companies, not rich individual persons. This rate has dramatically increased:
“Insurances, banks and pension funds are becoming increasingly powerful. They buy apartments and turn them into investment properties from which they generate as much return as possible. This results in terminations and excessive rents. The takeover of land by real estate companies is likely to be one of the reasons why rents have been rising almost continuously since 1985.”
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Are you sure about that? I think that’s true for apartments, but I don’t get the impression that’s true for houses. (the quote talks about apartments)
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From basic economic principles it must be all the houses. It’s one market subject to supply and demand. Ask yourself the question: If new housing rises in price, why shouldn’t existing housing rise as well?
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IDK what the split is between houses and apartments. But I’d say there are a lot more apartments on the market than free-standing single family homes. Buying a house has become increasingly unrealistic for the average Joe, except maybe in remote areas. Also, it seems like more and more houses are being torn down and replaced with apartment buildings (more profitable for RE companies I reckon).
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Because existing housing after 20+y need a hefty investment to bring back to standard of the day?
I reckon the existing housing price rises by a similar %, but then the price of the new kitchen, bathroom, windows and heating system must be subtracted for the selling price, no? And some other value-reducing factor because the 30yo house doesn’t feel the same as the new one (smaller windows, not most modern/desireable layout, lower tech standard)?
Of course, that will be accounted for in the price of the house. But it still rises on average the same.
Also the main cost of a house nowadays is the land it’s standing on and where that is.
Yeah I think there’s fairly different markets for single family home vs apartments (afaict MV only cares about apartment, I guess most houses are owner occupied)
Yeah that’s what OP was wondering about
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