Homeownership is becoming unaffordable
The home ownership rate is now falling after a decade-long increase. The reason for this is extreme prices and regulatory hurdles. Raiffeisen Switzerland found this in a study. The authors of the study rule out a bursting of the real estate bubble.
In the years since 1990, the home ownership rate has risen steadily. Now it is going back for the first time, writes Raiffeisen Switzerland in a report on the study ” The dream of having one’s own four walls ” by Raiffeisen Economic Research. “Real estate prices are still rising, but in the completely dry market, the extremely high prices and the high regulatory hurdles of the vast majority of Swiss are blocking the dream of their own four walls”, Martin Neff, chief economist at Raiffeisen Switzerland, is quoted there. “Only prices are booming on the home market today.”
According to the authors of the study, the rising prices are due, among other things, to the highly expansive monetary policy of the central banks. At the same time, they reject the speculation that the real estate bubble will soon burst. “The prevailing price level and the strong upward momentum can still be justified fundamentally and are not driven by speculation,” says Neff. “Even if the home market has now expanded significantly, this bubble will not burst.”
The authors of the study do not expect any relaxation in the home market in the near future. Neff therefore calls for “an open, unbiased public discussion about the future of Swiss home ownership”. According to the chief economist of Raiffeisen Switzerland, the increasing exclusion of large groups of the population from home ownership “without strong political will and the acceptance of certain systemic risks and societal costs” cannot be broken.