Real estate: much more than “just” a home
Real estate: aspects you should know about.

When it comes to investing in real estate – especially when buying your future home – emotional factors play a particularly important role. Many people have clear ideas about their dream home. They know where it should be located and what it should look like, and when they purchase a property, they are fulfilling a long-cherished dream. The danger is that emotional aspects will overshadow rational factors: what arrangements do I make for financing – including with my partner? What are real estate trends like in a particular location? Is real estate also worthwhile as an investment or income property?

The answers can be as individual as the property itself. That’s why it’s so important to address the topic in depth and to get involved in financial issues in particular. After all, it’s not just a matter of financing the property, but also of paying for running costs such as maintenance and repairs. This article will give you an overview of the topic of real estate and the real estate market in Switzerland.

The Swiss real estate market and its development

Home ownership is in high demand in Switzerland, which is mainly explained by the low cost of capital in recent years. Real estate prices have been rising almost uninterruptedly since the turn of the millennium, even though the pace of price increases has slowed somewhat in recent years.

The COVID-19 pandemic also affected this trend, as demonstrated by the following figures from the “UBS Outlook Switzerland January 2021”.

  • Owner-occupied apartments and single-family houses rose in price by an average of around three percent last year. This price trend applies to a broad number of regions in Switzerland. The most important mountain destinations even recorded the strongest price increases since 2012.
  • The number of employees who regularly work from home is expected to double in the next five years. Firstly, this will increase the need for more rooms than in current homes. Secondly, the rise in working from home casts doubt on the need to live directly in or near the city center.

The search volume of apartments and houses, especially single-family houses, increased in 2020. As fewer and fewer single-family houses are being built, but demand remains high, prices are expected to continue rising.

Home ownership: the key aspects

As long as interest rates are low, home ownership will remain attractive. As for mortgage interest, of course, you should always calculate carefully. Our mortgage calculator will help you. You can also subscribe to our interest rate forecast to be regularly informed about current interest rate levels and future interest rate trends.

The time and cost involved in maintaining a property are often underestimated: heating, electricity, water and miscellaneous maintenance and repairs. The dream of owning your own four walls can be quite costly in reality. As a rule of thumb, you should allow about one percent of the property value per year for maintenance and incidental expenses.

Lastly, there are also the tax aspects of home ownership to consider. The imputed rental value, i.e. the equivalent of the potential income from a hypothetical rental of the property, is counted as taxable income in Switzerland. In return, however, deductions can be made for maintenance or value-preserving conversions, for example.

Real estate is a popular investment

In recent years, investing in real estate has helped investors in Switzerland to achieve substantial increases in value and, as a rule, regular rental income. At the same time, bonds have hardly been profitable at all, and savings accounts have not been paying any interest, or even incurring negative interest It is therefore not surprising that more and more private and institutional investors are interested in real estate as an investment alternative. You can read about the options open to you as an investor in our article on real estate as an investment and income property.

We assist you with the purchase of real estate

As you can see, real estate is a multifaceted topic – whether you want to realize the dream of owning your own home, finance your purchase or invest in real estate as an investment property. It is also clear that the subject of real estate is not always easy – especially when it comes to financial aspects.

You will find more content on the topic at the UBS Women’s Wealth Academy. And if you would like a personal consultation, we are here for you.

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