How pension payments are making Swiss housing unaffordable
Under pressure to invest, Swiss pension funds are ploughing money into real estate, considered a safe and profitable option. As this drives up housing prices, however, desperate residents are fighting back through direct democracy.
And according to Thorsten Hens, Professor for Financial Economics at Zurich University, Swiss pension funds are under immense pressure to invest. “Prices for real estate tend to be higher in countries with capital-based pension funds like in Switzerland or the Netherlands than in countries with a pay-as-you-go system like in Germany,” he says.
“Like everywhere else in the world, there has been a trend towards moving to urban areas in Switzerland for many years,” says Hens. “I don’t expect this to change soon as people are less concerned about peace and quiet and are more interested in available services such as schools, hospitals, leisure facilities, etc.”
October 25, 2019