They like many others have a glut of low risk investment from their older folks. They are competing for debts that dont exist. Switzerland has rather low home ownership rates at around 40%. These elders also need to offload their homes and downsize but to who?
So interest rates have to crash to negatives, you get paid to take on debt; just so that someone buys their extremely expensive housing.
What if they dont lower it negative? What if it remains at 0%?
Elders seeking to downsize wont find a buyer and the whole market collapses. Elders who were depending on the value of their home to remain retired, suddenly are heading back to work. Which shows in their labour participation rate being around 84%. Third highest in the world.
I predict they'll head to -3% for a few years and if they dont, they'll hold the lower negative rate for much longer.
incomingpain•7mo ago
They like many others have a glut of low risk investment from their older folks. They are competing for debts that dont exist. Switzerland has rather low home ownership rates at around 40%. These elders also need to offload their homes and downsize but to who?
So interest rates have to crash to negatives, you get paid to take on debt; just so that someone buys their extremely expensive housing.
What if they dont lower it negative? What if it remains at 0%?
Elders seeking to downsize wont find a buyer and the whole market collapses. Elders who were depending on the value of their home to remain retired, suddenly are heading back to work. Which shows in their labour participation rate being around 84%. Third highest in the world.
I predict they'll head to -3% for a few years and if they dont, they'll hold the lower negative rate for much longer.