Buying real estate has become more expensive than renting for the first time in 13 years. This trend, supported by rising fixed mortgage rates, is likely to strengthen in the coming months, according to a study by Credit Suisse on Monday.
In the first quarter of 2022, the owners of an apartment or a house had to pay a premium of 3.1% compared to tenants while at the beginning of last year, they still benefited from a discount of 15, 5%.
The five-year fixed mortgage rate in particular experienced a strong increase: it stood at almost 2% at the end of the first quarter once morest 1.1% at the start of 2021, recall the specialists of the bank with the two veils.
“Combined with the strong rise in (property) prices, this has the effect that property surrender has become a premium within just a few quarters,” the study notes.
On the other hand, buyers who decide on a Saron mortgage continue to benefit from a property discount.
People interested in buying a property should therefore decrease, but given that construction activities are in decline and that very few objects are available on the market, “we assume that demand will remain excess and that house prices will continue to rise,” economists say.
Current owners, however, should not be affected by the rate hike immediately as most (80%) have chosen a fixed rate.
Going forward, interest rates for fixed mortgages should continue to rise. “After the last increase, we expect a further moderate increase over the next 12 months, but the average interest rate for the 2nd quarter will exceed that of the previous quarter”, anticipates Credit Suisse. Buying a property will therefore continue to be more expensive than renting.
Following the low mortgage rate following the onset of the financial crisis of 2008-2009, it had become common for the financial charges for owned accommodation to be lower than for rental. Previously, however, this was not the case.
This article has been published automatically. Source: ats/awp
