“My house is just a huge expensive brick weighing me down”, writes a homeowner on a Swiss political blog. His attitude is common in Switzerland, a country where levels of home ownership are almost half that of Australia. Switzerland is a wealthy nation of renters. In light of housing affordability being at 22-year lows here in Australia, it might be time to pick up a few tips from the conservative Swiss.
The Swiss share the Great Australian Dream of home ownership. They are just more cool-headed about the cost of realising the dream. At the moment it doesn’t make a whole lot of economic sense for them to buy their own home, despite interest rates that Australians would salivate over. The tax system in Switzerland does not currently favour homeowners, and the rental market is highly regulated, so cost effective, high quality properties and long-term tenancies are the norm. There is also no social stigma attached to renting.
The Swiss like to live well. They love to travel, enjoy owning nice cars and the latest gadgets. Mortgages eat into their disposable incomes. And it can also take some time to save the 20 per cent minimum deposit required by Swiss banks, in contrast with Australia’s paltry 5 per cent requirement. Since the early 90s the Swiss government has offered guarantees to buyers that don’t have a 20 per cent deposit; demand for these has been almost non-existent. It appears the Swiss don’t like to commit to a mortgage that they are not in a position to afford comfortably.