The dream of home ownership – is it still achievable?

For some, it is already within reach but for many, it remains a distant prospect: the dream of owning their own home. Home ownership is seen as a symbol of security – both emotional and financial. Yet in Switzerland, the dream is becoming increasingly difficult to achieve.

“For many families, it is now virtually impossible to buy their own home,” says Ursina Kubli, Head of Real Estate Research at Zürcher Kantonalbank. In this country, only around 40 per cent of people live in their own homes. This puts Switzerland at the bottom of the table in Europe.

And a study by Zürcher Kantonalbank shows that in the canton of Zurich, only 9 per cent of 30- to 40-year-old tenants can afford a detached house. “That is sobering,” says Kubli.

“Even in the past, only a limited number of people could afford to buy their own home. But this situation has become more acute over the last few decades,” adds Lorenz Laich, CEO of Clientis BS Bank Schaffhausen. “Many young people who buy their own home today can only do so with their parents’ support.”

Mortgages as the core business of banks

When the dream of home ownership becomes a reality, banks come into the picture. They provide financing, offer advice and take responsibility for sustainable solutions. The mortgage business remains a core area of the Swiss financial centre – particularly for regional banks. They know the market, assess risks realistically and remain the point of contact for years to come. “The local connection is key – you have to understand the market,” says Laich.

But for large institutions such as Zürcher Kantonalbank, too, financing is one of the most important functions. With over 100 billion Swiss francs in outstanding mortgages, it is a significant part of the portfolio. Kubli points out: “When you buy your own home, other issues such as inheritance and pensions very quickly come into play. A universal bank, such as Zürcher Kantonalbank, can take care of these matters too.”

Home ownership is a goal that requires careful planning. It is a general rule that every financing arrangement must be sustainable in the long term and take account of different life situations.

Local businesses benefit

Mortgages also stimulate the regional economy. Construction firms, tradespeople and architectural practices all benefit directly from the construction and renovation of houses.

“Local businesses are feeling the demand – not only for new builds, but also for maintaining existing properties,” says Laich.

Generational change could bring relief

Demographic change could ease the current tight situation in the long term: with the generational shift, older properties come onto the market. “When older owners eventually stop living in their homes, properties come back onto the market,” says Kubli. This could increase supply and ease the pressure somewhat.

People’s desire to own a home is unlikely to change. Especially in times of geopolitical uncertainty, many seek security in tangible assets – and home ownership is among the most stable of these.

The full conversation in German can be heard in the podcast “Is the dream of home ownership already over for many?”