Surprising Shift: Homeownership Becomes More Attractive Despite High Property Prices

Home ownership has become more attractive for many, despite the high prices of properties in recent years. This is due to a combination of factors, including lower interest rates and the competitive rental market. The Swiss National Bank (SNB) has recently made a decision to keep interest rates at zero after a series of rate increases, which has led to an increase in demand for condominiums. According to consulting firm Wüest Partner (WP), there has been a 7 percent increase in search subscriptions since the middle of last year, indicating that more people are considering buying their own homes.

One reason for this shift is the relaxed interest rate situation over the past six months. Following a series of interest rate increases, the SNB 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. Additionally, the rental housing market has become increasingly competitive, prompting many to consider buying a home instead. While there may not be a shortage of homes on the market, high property prices have made it difficult for potential buyers to make a purchase.

Despite this increased demand for condominiums and decreased transactions, property prices have continued to rise. According to WP, condominium prices increased by 3 percent last year and are expected to continue rising this year. The cost of owning a home has almost doubled at times since the interest rate turnaround in 2022, but with recent interest rate cuts by SNB, it may once again become more affordable than renting.

This shift in the housing market has led sellers holding firm on their asking prices as buyers may soon find it more affordable to buy than rent. With the prospect of further interest rate cuts by SNB and increasing competition in rental housing market