Monday, October 10, 2011

But i thought high house prices were good for an economy!!!!

Cap on Franc Pushes Switzerland Closer to Repeating 1980s Housing Bubble

A rise in real-estate prices is among the greatest threats to Switzerland’s economy, Swiss National Bank Chairman Philipp Hildebrand said in June. He made the remarks less than two months before the bank lowered rates to zero, after warning more than a year ago about the possibility of a bubble.

Posted by mark @ 10:48 AM (1142 views)
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2 thoughts on “But i thought high house prices were good for an economy!!!!

  • mark wadsworth says:

    The Swiss know that, which is why they have Schedule A tax/Domestic Rates (crude forms of LVT) and for rich foreigners, there’s an option to not declare your income and pay tax on it, you just pay a fixed % of the value of your main residence in quasi-income tax and have done with it (between 5% and 8%, depending on Canton).

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  • Purchase price CHF 1,200,000 (£840,000) versus rental value 3,000 (£2,100) per month implies a yield of 3%. That’s frothy bubble territory, but not much worse than parts of London.

    Salaries are rather good in Switzerland though…!

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