Why is Homeownership So Low In Switzerland?

FGP Swiss & Alps

You have to admit that Switzerland is one of the richest countries in the world. You have so much money that you can easily retire and live the good life for the rest of your days. But in Switzerland, the majority of people rent their homes. Only 47% of Swiss households own their home, which is the lowest rate in the EU. The average Swiss household rents for approximately €2,300 per month, and in some areas, such as Zug, the cost is even higher. 

So why is there so little homeownership in Switzerland?

It’s not easy to answer. There are several factors at play, but a lack of affordable housing and culture of home ownership probably plays a big role. Here we have listed some of the reasons why Switzerland is so far behind its neighbors when it comes to the ownership of homes:

1. Housing prices

Housing prices in Switzerland are very high. According to the Swiss Federal Statistics Office, average house prices in Switzerland are twice the average cost of houses in other European countries. In Zurich alone, the average price of an apartment has increased by 40% since 2001, while the price of a detached house has doubled. 

2. High-Interest Rate

The reason why it’s so expensive to own a home in Switzerland is that the banks charge a lot of interest on their money. How does this affect you? If you have a mortgage on your house, then you’re paying high-interest rates for years. The result is that it takes more and more money to afford the house over time. This means that the majority of people never own their homes and just rent them out.

Many people in Switzerland are afraid to buy a home because of the high-interest rates. It’s expensive to pay high-interest rates. Most people don’t have enough money to afford the high-interest rates. For example, if you take out a loan for a house and you pay 3% interest, then you have to pay €1,500 every month. So how do you afford this? It’s impossible! But now, the Swiss government is trying to make buying a home cheaper and easier. The reason why they want to do this is that they want to increase homeownership in Switzerland.

3. Culture of renting

In Europe, homeownership is a deeply rooted part of society. Most young people are taught that owning a home is important and a good investment. In contrast, in Switzerland, the culture of renting is very strong. Naturally, this is a main reason for low rate of homeownership.

In fact, the culture of renting is so strong that in Switzerland, renting is more common than buying a home. According to the Swiss Federal Statistics Office, the majority of people in Switzerland are renters. In fact, the rate of renting is so high that the country has one of the highest rates of renting in the world.

4. Homeownership is not for everyone

In Switzerland, there are many people who don’t want to own a home. They like the idea of renting. Why? Because it’s easy. You can just move to a new place whenever you want. You don’t have to worry about your home, because you can always rent it out. You don’t have to worry about the cost of maintenance.