Buying a home has become more expensive than renting in the past two years, yet home prices have not fallen. However, the recent decision by the National Bank to lower interest rates again has led to an increase in demand for condominiums. The consulting firm Wüest Partner (WP) reports a 7 percent increase in search subscriptions since the middle of last year, indicating that more people are considering buying their own homes.
One reason for this increase in interest is the relaxed interest rate situation over the past six months. After a series of interest rate increases, the Swiss National Bank (SNB) 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. The cost of owning a home has almost doubled at times since the interest rate turnaround in 2022, but with the recent interest rate cuts, the cost of 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 prospective interest rate cuts
