In the coming decades, hundreds of thousands of homes belonging to the baby boomer generation will become vacant. However, the transfer to the next generation is unlikely to happen as quickly as many hope. Switzerland, a country known for its wealth, has a relatively low home ownership rate compared to other developed countries. While some may see this as a sign that being a tenant is not stigmatized, it is only partially true.
For 25-64 year olds, the situation is different. Only a little more than one in five households in this age group live in their own property. However, for those over 65, more than half of these households live in their own four walls. The high home ownership rate among the baby boomer generation is primarily due to a time when there was still plenty of building land and new home construction was booming. Many of today’s pensioners made the investment of their lives by buying an apartment or single-family home. The real estate price index of IAZI has more than tripled between the early 1980s and today.
When older people move into a rental apartment with comparable comfort, they often pay a new rent that is significantly higher than the mortgage interest they have previously paid. This can be due to several reasons such as emotional attachment to their homes or lack of willingness to move due to financial considerations or uncertainty about what will happen after retirement.
It is important for younger generations who currently have little financial means to purchase their own property on their own to understand how the transfer between generations will take place and plan accordingly. They may need to wait until supply increases and prices decrease before being able to afford their own homes without taking on excessive debt or risking financial instability in old age.
