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The Forum > Article Comments > The Swiss are home free > Comments

The Swiss are home free : Comments

By Clarissa Keil, published 24/12/2007

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.

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There is another explanation on why the Swiss are "better savers" than it being an inherent characteristic of Swiss nationals. I suggest that the reason that Australians have a lot of debt is that Australian financial institutions are "better and more aggressive" lenders.

In Australia banks will lend you money to purchase a house against your income not against the value of the house. That is, banks are able to reduce their risk of lending money for houses by lending against your future earnings in addition to lending against the house. If the house value drops and you have to sell your house for less than your mortgage on the house then you are left with the debt. Stop the ability of banks to take a lien on your salaries if your house value drops and you have to sell and Australian house prices will return to an affordable level.
Posted by Fickle Pickle, Monday, 24 December 2007 11:15:29 AM
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I don't know about Switzerland but in Australia, mining companies rent land after signing 99 year leases (or a similar time period). Why not have an identical system for home renters? I can't get over the fact that commercial leases in Australia are usually longer than home leases. More 99 leases for home renters would mean less demand on the housing market. But of course, it would mean that Meriton et al would see a fall in profits. And that would be heart-breaking.
Posted by DavidJS, Monday, 24 December 2007 12:13:49 PM
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The Australian economy has been developed to make home ownership the ideal for all Australians.Count the number of REAL ESTATE AGENCIES in your area.They and the Banks would fight tooth and nail against any move to make us more like the Swiss.Unfortunately "Democracy" as we in Australia know it, is to lobby polititicians to get as much largese for their electorates as they can.Capitalism is fundamentally selfish. True stories abound here of someone buying land for peanuts that 30 years later is worth millions.The redistribution of wealth in the population is a dirty word smacking of communism.We have been taught to value wealth and aspire to own a home as the first step.Is it the best system? Who knows? Who wants to emigrate to Switserland?
Posted by TINMAN, Monday, 24 December 2007 2:33:16 PM
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i would, except i'm more beach oriented than skiing
Posted by DEMOS, Monday, 24 December 2007 2:55:59 PM
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Interesting article, but Switzerland with it's population of 7.9 million people is not Australia. so its quite concievable for swiss to be prepared to move to the outskirts of town to buy a house when the largest city, Zurich, has a population of under 400,000 people. Few Sydneysiders will commute from the central coast or western suburbs to Manly for a low paid 5 hour shift.

The Howard government introduced the first home buyer's grant to bolster a flagging building industry and improve employment rates.

Australians see renting as a tempory situation and many landlords will not upgrade their properties beyond a basic standard because who do the tenants think they are. This means that Australians must own the roof over their head by the time they retire or they are in for cold hard shrift. Although financial planners attached to Centrelink in G*ds waiting room have advised widows to rent rather than buy.
Posted by billie, Monday, 24 December 2007 3:07:53 PM
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I'm sure it has nothing to do with the fact that Switzerland has relatively high rates of land tax, thus encouraging investors to put their money in to buildings instead..

Nope, that couldn't have anything to do with it...
Posted by Lev, Monday, 24 December 2007 4:49:46 PM
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