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House prices vs wages Fewer Swiss able to afford their own property

Houses overlooking Lake Zurich, one of the most expensive areas for property in Switzerland


Buying property is out of the question for more and more people in canton Zurich, according to a study by the Zürcher Kantonalbank (ZKB). Whereas in 2008, one in six families (17%) could afford to buy a house, last year the figure had dropped to one in ten.

The study analysed the average price of a detached house in the canton, according to a reportexternal link in the Tuesday edition of Zurich’s Tages-Anzeiger. In 2008, this amounted to CHF980,000 ($1 million), but by 2015 buyers would have had to fork out CHF1.3 million.

This increase is the main reason that fewer people are buying property: the ZKB studyexternal link found that whereas between 2008 and 2015 taxable income rose by only 1.8%, house prices shot up by 23%.

Peter Meier, head of financial engineering property at ZKB, told the newspaper that families had adapted. “They act according to the options they have and increasingly buy smaller, older or less centrally located houses.”

An additional hurdle for families considering buying a house is the higher mortgage requirements: 20% of the house price must be paid immediately and one’s pension fund can only contribute 10% of the price.

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The ZKB analysts calculated that for a house costing CHF1 million, a prospective buyer would need a net income of CHF100,000 and assets of CHF450,000.

Developers adapt

One consequence of this dwindling circle of people eyeing pricier property is that real estate developers are adapting their projects: instead of building detached houses for a single family with a sizeable chunk of land, they are focusing on smaller terraced houses.

“Regardless of whether we’re talking about an owner-occupied flat or a rented flat, a project must match the needs and possibilities of the occupier,” said Matthias Meyer, spokesman for the Zurich-based Allreal real estate company. and agencies

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