In the vast majority of cases, people who are just starting out on the career path, whose salaries have not yet reached a high level, and who haven’t yet accumulated enough savings or pension funds for a down payment, are left out of the property market.
That’s because the financial calculations that banks carry out before granting a mortgage makes many young buyers simply ineligible.
Wüest Partner real estate consultants crunched the numbers and reached this conclusion.
In fact, the average age for property purchases in Switzerland is 48; this is when, on average, the salaries and other assets of high-income individuals are deemed to be adequate to obtain a mortgage.
Does this mean that young people have no chance whatsoever of ever becoming homeowners?
Things are not quite so bad.
While it is true that certain regions — such as Zurich, Geneva, Basel, and parts of Vaud, for instance — are out of their reach because property prices there are among the highest in the country, buying in other parts of Switzerland remains feasible.
That’s the good news.
The not-so-good news is that there are only three regions in Switzerland where housing might be affordable for people under 35.
Wüest Partner looked at where people from this age group could possibly afford to buy a property, basing its analysis on a loan covering 80 percent of the market value of a condominium, at a theoretical interest rate of 5 percent, an annual depreciation of 1 percent, and maintenance and incidental costs equivalent to 1 percent of the property's value.
All this, without housing costs exceeding one-third of gross income, an essential condition for ensuring both initial affordability and further sustainability.
Based on these criteria, the consultancy came up with three options: only Jura, Valais, and Ticino have favourable housing income/cost ratios in some parts.
The rest of the country is completely inaccessible, from the financial point of view, to under 35s.
Location, location, location
Concretely, Jura is by far the most advantageous region, since almost the entire territory — from Mervelier to Boncourt — remains relatively affordable and within reach of young people. (The analysis did not provide house costs).
In Valais, reasonably-priced real estate can be found in certain municipalities in the German-speaking part, notably in Gampel, Turtmann, Ausserberg and Fieschertal.
As for Ticino, communities of Airolo, Quinto, and Faido to still have properties that are affordable for under-35s.
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