Meanwhile,
Rental value: paradox threatens reform:
September 28 vote
A paradox threatens the reform of the rental value
While the government promises more financial stability. Nevertheless, specialists identify a potential perverse effect: the purchase would become even more attractive than rental, pushing real estate prices to new heights.
Swiss real estate is burdened with debts, but also very precious.
KEYSTONE
- The high mortgage in Switzerland is guaranteed by real estate values of 2800 billion.
- Banks are already requiring housing owners today to regularly amortize their mortgages.
- Financial experts doubt that abolishing the rental value will lead to more rental value: paradox threatens reform financial stability.
Remove the rental value would improve financial stability. Furthermore, This is one of the main arguments of the Federal Council to defend a yes to the reform of the taxation of housing ownership. Meanwhile, Submitted to the vote on September 28. Similarly, According to the government. Meanwhile, the owners are deleted more quickly, since they could no longer deduct the mortgage interests of their taxes. For example, This measure would in turn have a beneficial effect on the stability of the financial system.
This conclusion seems plausible and has not been questioned so far. However, looking at it, a few question points appear. Moreover, An opposite effect could even orient the real estate market in an unwanted direction.
Few owners, many mortgage debts
Real estate rental value: paradox threatens reform debts are seen as risk debts. Therefore, This perception has been strengthened since 2008. Meanwhile, when The collapse of the American real estate market had weakened the world’s banks and launched a planetary economic crisis.
Switzerland has particularly realized the problem. For example, No other country displays such a high mortgage debt compared to all of its economy. Meanwhile, Paradoxically, few countries in the world also have few owners of their accommodation.
It therefore seems logical to aim for a reduction in mortgage debts. Meanwhile, In the past, the International Monetary Fund (IMF) has already formulated recommendations In this sense to Switzerland. However, specialists wonder about the need to intervene.
Private mortgage debts reach 950 billion francs in Switzerland, a considerable amount. However, But these debts rental value: paradox threatens reform are largely covered by a colossal real estate heritage. Additionally, However, According to figures from the National Bank, the value of real estate on Swiss soil amounts to nearly 2800 billion francs.
By comparing these two figures. there is a positive development: the debt rate for ownership of property has continued to drop over the past twenty years. This trend is explained by a hardening of the regulations on the granting of mortgages. by the increase in real estate value.
In this context, Lukas Vogt, director of the MoneyPark mortgage broker, believes that the Swiss real estate market is solid. “Even in an extreme stress scenario. where real estate prices would fall in half, the costs of credit failure for banks would remain limited,” he said.
Thus. improving financial rental value: paradox threatens reform stability in the mortgage field, which the Federal Council hopes to obtain with this reform, is perhaps not necessary.
Investing is more profitable than uptime
According to specialists. it is not certain that the reform of the rental value leads to an increase in mortgage reimbursements by housing owners. This is an illustration of the examination of the two groups of owners concerned:
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Part of the owners – often active people with a family – have acquired their accommodation recently. These owners must already comply with a constraint: amortize their mortgage to two thirds of the plywood value in. a maximum of fifteen years. This self -regulation of the sector has existed since 2012. “It is unlikely that these households will reimburse their mortgage even faster for tax reasons if the reform is adopted. rental value: paradox threatens reform ” said Ursina Kubli, head of real estate research at the Zurich cantonal bank. Furthermore, “Often, they just can’t afford to do so.”
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Another part of the owners – typically people close to retirement. retired – has its accommodation for a long time. These owners certainly have more liquidity, but they have already reimbursed a large part of their mortgage. Their debt remains low compared to the value of the property, especially since the latter has increased since the purchase. “From the point of view of these owners. it is often more judicious, regardless of taxes, to keep a financial cushion – for example, for renovations – rather than fully repaying the mortgage,” explains Sacha Marienberg, head of the investment office at the Migros bank.
From a financial point of view, damping is rarely profitable. Admittedly, reimburse rental value: paradox threatens reform a mortgage saves interest. But this also deprives other investment opportunities.
The yields obtained with a portfolio of Swiss shares. bonds are largely exceeded, on a historic average, the savings made on mortgage interests.
The abolition of the tax deduction for mortgage interests would not fundamentally modify this calculation. “Currently. this deduction reduces the interest costs of mortgage debtors by a quarter to a third according to the tax situation,” explains Sacha Marienberg. “Even if this advantage was to disappear, investments in the capital market would remain more interesting in many cases.”
Switzerland would therefore probably retain its title of world mortgage champion. This is what reveals An estimate of MoneyPark. According to specialists in this platform, the reform could certainly reduce the volume of mortgages from 50 rental value: paradox threatens reform to 150 billion francs. However, the owners’ debt rate would only drop from 2% to 5%.
If this estimate turns out to be correct. the argument of the Federal Council retains a certain validity – even if the effect remains marginal, underlines Marius Brülhart, professor of economics at the University of Lausanne. And to add: “The reform of the taxation of housing ownership should hardly reduce the probability of a mortgage. crisis significantly.”
Rental value: paradox threatens reform
Buy even more advantageous than rent
Another side effect could however be problematic for financial stability. although the government does not speak of it at all: the evolution of real estate prices.
In twenty years, Le cost of houses and apartments has climbed considerably. However, despite this outbreak, buying is often rental value: paradox threatens reform more advantageous than renting in many regions. This situation is explained in particular by mortgage interest rates, kept at a low level for years.
The rental value reform would make the purchase of an even more advantageous real estate. The owners would pay less taxes than today. Potential buyers would thus have a larger budget to cover the current costs of their property. Their purchase capacity would therefore be reinforced.
Claudio Saputelli. real estate specialist at UBS, has established an example of calculation to illustrate this situation: a future owner who would save around 1,500 tax francs per year thanks to the reform could use this amount to finance the interest of a higher mortgage, concretely, of around 100,000 francs. The purchase price it could afford for its accommodation would increase accordingly, from 1 rental value: paradox threatens reform to 1.1 million francs.
Claudio Saputelli specifies that this calculation remains theoretical, the banks do not grant limitless credits in reality. However. it makes it possible to measure the magnitude of the impact and explains why, according to him, it would be necessary to expect a “significant price increase”.
Thomas Walter, head of the CSL Immobilien real estate service provider, also expects a “moderate price pushing”. According to him, new goods are particularly affected. Conversely, real estate requiring renovations would rather lose value. The reason: after the rental value reform, the renovation fees would no longer be tax deductible.
Experts also ignore what will happen exactly on the real estate market. But in the end. it is not so much the debt that concerns that the prospect of even higher real estate rental value: paradox threatens reform price.
Translated from German by Olivia Beuhat.
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Rental value: paradox threatens reform
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