As "Head of Real Estate Research and Strategy" at Swiss Life Asset Managers, the well-known asset manager and leading institutional real estate manager in Europe, she has unrivalled knowledge of current real estate trends. If you're thinking about building a self-determined life in your own home, find out about Francesca Boucard’s perceptive insights into the future of home ownership.
Dear Francesca, demand for residential property in Switzerland remains high. Why do you think that is?
The desire for one’s own four walls is indeed still very strong due to the low interest rates and the attendant low housing costs, and the sector has proven highly crisis resistant. The increased amount of time spent at home recently has reinforced the dream of home ownership.
Have the selection criteria for home ownership changed?
I think the selection criteria for home ownership have not changed. However, awareness of the topic has risen markedly in the current situation. Many employees no longer have to commute to the office every day. As a result, properties that are not entirely central have become more attractive. At the same time, good transport links are still high on the wish list. Exactly how society will develop remains to be seen. But there will certainly be changes.
The coronavirus crisis has shown many people the importance of having their own four walls. Many attach greater importance to personal space and access to green and recreational areas. Will these factors remain sustainable?
It can be assumed that the experience with the lockdown, working from home and social distancing in general have influenced our residential needs over the long term. Rural residential areas and extra rooms have most likely become much more important as personal preferences. However, it should not be forgotten that the continuous price increases have meanwhile pushed prices really high, making it difficult for many Swiss households to realise their dream of residential property.
What should prospective buyers bear in mind in the current price situation?
Future property owners will have to deal with the capital adequacy requirements and regulatory hurdles. Firstly, higher prices mean buyers will have to contribute more equity than they used to. Secondly, the regulator calculates 5% viability.
In a nutshell: this means that the higher the property prices, the higher the mortgage and the higher the income required to obtain financing in the first place, despite the record-low interest rates. This forces potential buyers to make compromises in terms of the size, location or standard of their dream property.
What general housing trends are there that should be taken into account?
The high demand for property is faced with relatively scarce availability, which will not expand quickly. At the same time, however, financing conditions remain low: there is no prospect of a rise in interest rates for a number of years, which is why mortgage rates should remain close to their record lows. However, upward or downward fluctuations cannot be ruled out in the meantime.
As long as property has an advantage over renting, in addition to the attendant self-realisation considerations, there will be strong demand for single-family homes and condominiums. This comes with difficulties in terms of finding a suitable property.
However, that’s no reason to become disheartened. It's worth finding out precise information and enlisting professional support to show you the possibilities for your current and future life situation.
Our experts at Swiss Life and Swiss Life Select would be happy to advise you on financing your own home – at a location of your choice or online by video.
Let us help you buy your own home. Let's go.
Do you dream of a self-determined life in your own home? To make this dream come true, there are some things you need to know first. Find out more now about saving, financing, affordability and mortgages.