Swiss real estate market in 2019: Buying currently costs less than renting
Buying a home is cheaper than renting in many places thanks to low mortgage interest rates, as illustrated by the 2019 Credit Suisse real estate study. Our calculator helps you determine whether renting or buying is cheaper for you.
Should you rent or buy? The real estate study calculator
Owning your own home is more attractive than renting thanks to historically low mortgage interest rates. The 2019 Credit Suisse real estate study compares the average rent for advertised 4½-room apartments with the interest costs for a condominium of the same size: At CHF 7,862 per year, the interest cost (five-year Fix mortgage) – assuming a loan-to-value ratio of 80% – is significantly lower than the annual rental cost of CHF 22,308.
Interest costs are, of course, not the only costs that homeowners face. On top of this there are maintenance costs, for example. These average about one percent of the property's value. All in all, this increases the cost of the condominium to CHF 15,362 per year. Nevertheless, that is still significantly less than the cost of renting. Our calculator enables you to compare interest and maintenance costs on a condominium with the cost of renting.
Should you rent or buy? Use the calculator to find out.
Compare the rent on your current apartment with the cost of paying for your dream home. Interest and maintenance costs are taken into account. Amortization payments are not costs; they simply represent a transfer from cash to the assets tied up in the home.
Home ownership costs less, even when all the details are taken into account
Whether it's cheaper to buy or rent a home in your personal situation also depends on many other factors. These include your tax situation and opportunity costs, i.e. alternative ways of investing your equity. The dangers of risk concentration and the risk of temporarily being unable to sell the property also need to be taken into account. By contrast, real estate creates income opportunities thanks to the long-term increase in the value of your property. These factors nevertheless differ greatly depending on your personal situation, and are not taken into account in the calculator. However, the 2019 real estate study shows that, even when all the details are taken into account, buying often costs less than renting at the moment.
You should also include repayments in your budget if you have a high loan-to-value ratio. By making repayments you're not spending the money – instead you're investing it in your own home. In other words, repayments aren't really housing costs; all you're doing is transferring your cash assets into the assets tied up in your property. That's why they are shown separately in the calculator.
Real estate study shows regional differences
The cost of home ownership varies from region to region. Land and property prices are key. In tourist regions in particular, home ownership is more expensive than comparable rental properties at the moment. In these regions, buyers are willing to pay disproportionately high prices for second homes.
The real estate study also compares rental and purchase prices for the whole of Switzerland. Our interactive map shows average selling prices and monthly rents across the individual regions. You can switch the view by clicking on the rent/buy button at the top left. By clicking on the region, you'll find out what monthly and yearly savings you can make on the lower-cost option.
How much does it cost to buy or rent a home in your region?
Select your desired region and find out how expensive it is to buy or rent there. Or select the national comparison by clicking at the top left. This comparison is based on advertised existing 4-room and 4½-room residential units (excludes new properties).
Data point: Q4/2018. The calculation is based on an interest rate of 1.3%. Interest rates can change at any time.
Mobile: Click on the lock icon to activate the map functions.
When interest rates rise, buying becomes more expensive than renting
Whether it costs less to buy or rent a home depends largely on mortgage interest rates. As long as rates remain low, buying is usually less expensive. But if interest rates rise significantly, the situation changes.
The interest rate at which renting becomes the lower-cost option varies by region, property, and loan-to-value ratio. Use our calculator to find the mortgage interest rate at which buying would become more expensive than renting for you personally. It's a good idea to keep abreast of mortgage interest rates. That said, many owners are also prepared to pay more for their own dream home than for a rental property. This has commonly been the case in the past.