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In June, local banks were reprimanded by the National Bank (SNB). For mortgages intended for residential real estate, they would take too high risks (Blick reported). The SNB fears imbalances in the mortgage and real estate market and calls for new measures. Shortly after, Finma banking supervision took care of the case.
Now, "Switzerland on weekends" reported that "waving with the closing post of SNB and Finma was apparently understood." From knowledgeable circles, the newspaper wants to know that appropriate discussions in the Bankers association would unfold. This does not negate the deliberations, but does not want to give any information. After all, in June, he was still saying, "Any additional measures we criticize."
In Frontier Financing
What could be new measures? It would be conceivable for mortgages for apartment buildings, for example, that banks should support these with more equity, according to a report from UBS economists. A limitation of the loan to a certain part of the investment or a faster repayment is conceivable.
The SNB has already announced that Finma wants to keep an eye on the banks that are ready for high risk. Apparently, especially in the investment market in multi-family housing regularly violates the directive on portability. This means that borrowers could only finance their loans insufficiently if interest rates rose to 5%.
Saving and Taking Higher Risks
The reason is the relatively low rents. While real estate has grown 60% over the last ten years, rental income has only increased by 10%. For the investment to be profitable, savings are realized to the extent possible – for example with short-term mortgages. This too carries risks. Due to rising interest rates, such owners could very quickly experience financial difficulties.
It is still unclear where the negotiations are going on within the Bankers Association and what rules are imposed by the banks themselves. It is clear, it is a lot of money. Overall, there are currently rental housing units in Switzerland worth one trillion francs. According to UBS estimates, mortgages up to 250 billion CHF would be available. (jfr)
Posted on 28.07.2018 | Updated at 17:46
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