Buying a home has been more expensive than renting for the past two years, but that is about to change. The National Bank recently lowered interest rates again, leading to an increase in demand for condominiums. This shift in the housing market has led sellers to hold firm on their asking prices, but with the prospect of further interest rate cuts, buyers may soon find it more affordable to buy than rent.
One reason for this increase in interest is the relaxed interest rate situation over the past six months. Following a series of interest rate increases, the Swiss National Bank 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.
In addition to lower interest rates, the rental housing market has also contributed to the renewed interest in home ownership. The rental 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, the high prices of properties have made it difficult for potential buyers to make a purchase.
Despite the increase in advertised condominiums and a decrease in transactions, property prices have continued to rise. According to WP, condominium prices increased by 3 percent last year and are expected to continue to rise this year. With recent interest rate cuts, owning a home 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 further interest rate cuts on the horizon. As such, it’s important for potential buyers and renters alike to carefully consider their options before making any decisions about purchasing or leasing property.
The recent trend towards condominium living is also driving demand upwards with Wüest Partner (WP) reporting an 7 percent increase in search subscriptions since mid-last year indicating that more people are considering buying their own homes.
Interestingly enough despite there being fewer transactions happening due to higher advertised condos and lower mortgage rates owners are still seeing an increase in property values with last years condo value increasing by 3%.
