Mortgage rates are rising, living space is shrinking You can afford your own home - on this condition
Mortgages are becoming more expensive, but real estate experts remain optimistic: despite rising interest rates, home ownership is still a safe investment opportunity. Only the banks can throw a spanner in the works for buyers.
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- Mortgage interest rates in Switzerland continue to rise, especially for long-term loans, making real estate financing more expensive.
- Despite higher costs, real estate expert Rolf Wirnsberger still sees real estate as a safe investment, as building land remains scarce and demand is rising.
- While banks are stricter when it comes to granting mortgages, the desire for home ownership remains, even if buying behavior has changed.
Anyone wanting to finance a property in Switzerland will have to take a deep breath - and dig even deeper into their pockets. Mortgage interest rates are rising sharply and there is no sign of a turnaround.
Long-term loans are particularly affected: the difference between ten-year and two-year mortgage rates has risen to 0.49 percentage points - the highest value since November 2022. This means that longer terms are becoming increasingly expensive, while short-term financing is becoming more attractive again.
For property buyers and homeowners with expiring mortgages, this means a considerable additional burden.
Still a safe investment
Rolf Wirnsberger is Broker Owner at the real estate company Remax Wallisellen. He says: "I don't believe that the interest rate is the main factor that decides whether people buy a property or not. Psychologically, a 0.2 percent difference in interest rates doesn't make too much of a difference.
Rather, the origin lies in the current climate and uncertain global politics. "I think people are more concerned about global politics than the current interest rate trend. A property is a long-term investment and people are more concerned about what the situation will be like in 10 years' time," says Wirnsberger.
However, Wirnsberger is still convinced that investing in a property is a good thing. "Investing in real estate is still a very safe way to invest your money - in the long and medium term."
This is because building land is becoming increasingly scarce in Switzerland and the population is growing. In other words, there will be more and more people looking for living space. "The idea of buying a property and living in it yourself or renting it out still makes sense for the future," says Wirnsberger.
Do today's generations really have it harder?
"I always tell the same story," Wirnsberger begins and continues: "A man I once met in Davos bought a house 40 years ago." Back then, he spent two weeks of sleepless nights. Because it was a big investment and he didn't know how he could afford it. "Today, he says it was the best investment of his life."
There is actually no difference between today and 50 years ago. The starting position is the same. "Leaders had different incomes than 40 years ago, but property prices were also lower. Today, people earn more, but prices have also risen," explains Wirnsberger.
The banks have changed
The real estate expert sees more of a change in the banking sector: "Today, it's the banks that make the decisions. They have become somewhat more moderate when it comes to granting mortgages. This is due to various factors."
The contact between bank customers and bank employees is no longer as personal: "Today, someone from the back office processes mortgages." In addition, the demands on a mortgage holder from the bank have increased.
But what is the real estate market really like?
"I think the desire to own a home is still very strong," says Wirnsberger. The path to this has become somewhat rockier. "When we put a property on the market, we used to have 20 inquiries, now we have maybe four." However, this does not mean that all 20 enquiries have actually bought.
Wirnsberger believes that buying behavior will pick up again, for example if there is less security on the stock market or other investment opportunities. "Then people will consider investing in other, safer investments, such as real estate," he says.
