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We (I) make a decision

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With the sunshine factor in mind, I realized that I did not necessarily want to live on the dark, busy street sides of Building A, but I was still interested in saving money, so I went to visit the site where Flat B would be built.

Do you see a building in progress? I sure as heck don’t!

It took me awhile to find the site because the Flat B project had not even broken ground. This was kind of surprising and disappointing because we had already visited Flat A and the whole complex was practically raised. Flat B was supposed to be finished by autumn, but it was so far behind that I wondered if it would even get done before 2014 and we wanted to move sooner to start saving money earlier.

While I was searching for the flat I also noticed there was not much in terms of shopping or entertainment nearby. The building site was also next to that big, ugly toll road. The whole place just looked unappealing and as I walked back to the train station, I thought about how long it would take to haul luggage to the train in the rain if we lived here.

Kay was out of the country and said he would leave the decision up to me, but after visiting both sites, my mind was made up. The extra space of a 5.5 room flat was verrry tempting, but we decided to go ahead and buy Flat A! We aren’t planning a family any time soon, so it didn’t make sense to sacrifice on location for space.

Money is important, but it if you have a choice, leave the decision up to location! I was much more excited about all the trains, trams and buses that will take us to our new flat! And location is always that one thing you can’t change later.

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Paying for Sunshine

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After reviewing hundreds of neubau flats, I noticed an interesting pricing structure. You pay to be higher up, but you also pay for more sunshine.

It even works similarly with rentals. People pay more money to have a sunnier location and sunshine seems to be very important for the Swiss. How else will you grow your herb garden?

But at times it seems a bit ridiculous.

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Flat A vs Flat B: Location vs. Cost

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Between erstbezug, Comparis, and a few housing trade shows, at the beginning of the year I was swimming in neubau options. We had choices anywhere from 2 room to 6.5 room flats with terraces or gardens, but location and cost made it difficult to weigh the options.

It seemed like almost anything within the city limits of Zürich was priced at one million plus, no matter how far away from public transportation it was. And most of the loftier 5.5-6.5 flats were in towns 45-60 minutes to Zürich by bus and train, which was further than we were willing to move.

Erstbezug helped me find a few building sites near Zürich with flats that actually fell in an affordable range. From the project pages I was able to go through each of the flats at a building site and look for something in our size and price range.

The race came down to two flats/building sites, where I mulled over the possibilities over and over.

Flat A:

I found the Flat A project almost at the beginning of my housing search at the end of 2011. The flats were still pretty expensive for the space you get, but the location had so many good things going for it and the flats looked amazing.

Image via Homegate.ch

The Good:

  • 10 minute train ride to Zürich main station
  • Train, tram and bus lines available
  • Direct routes to the airport
  • Large shopping center across the street
  • Remarkable 90sq m (968 sq ft) balcony in some flats
  • Finished in summer 2013
  • My commute only increases by 5-10 minutes.
  • Kay’s commute would but cut in half

The Bad:

  • Still pretty damn expensive
  • Not sure how much we actually save much by moving
  • Only 3.5 rooms, meaning we will definitely outgrow it if we start a family.

Flat B:

I found the Flat B project a couple months into my search. It was a relatively new project and most all of the flats were free. If we chose to go with a 3.5 room flat with 20sq m (215sq ft) less than flat A, we could stand to save 250,000CHF on the price of the home.

Or if we paid the same as Flat A, we could upgrade to a 5.5 room flat with 20sq m more than Flat A. Decisions, decisions.

Image via Homegate.ch

I couldn’t stop imagining a bedroom, walk in closet room, guest room and office…

The Good:

  • So. much. space.
  • Value for money
  • Possibility to save a ton per month if we stuck with a 3.5 room
  • Parking spaces were a few thousand cheaper than Flat A
  • Kay’s commute would stay the same

The Bad:

  • 15 minute walk to local train stop
  • 25 minute total commute time to Zürich main station, not great.
  • Only the far away train and an unhelpful bus route nearby
  • Smaller terrace than Flat A
  • No groceries nearby, no large groceries at the train stop
  • Finished autumn 2013, getting a bit late
  • My commute would increase from 30 minutes to 1 hour one way.

During the whole process of looking for flats and trying to convince Kay that buying was a good idea, we missed out on a cheaper option in the building of Flat A. There was another 3.5 room flat the same size, but with a smaller (but still sizable!) 25 sq m (269sq ft) balcony and a small loggia that was selling for about 100k less than Flat A. I would have chosen it to save money, but shortly after we visited the showroom, the flat was already reserved.

The problem with building A was that we were a bit late in discovering it. Half the apartments had been purchased already and I could tell that there were larger 4.5 and 5.5 room flats that had gone for less than the price of Flat A. Hell, there were other 3.5 room flats that had gone for 250,000 less!

I felt like we were slightly too late with Flat A and that if we really wanted to capitalize on being an early bird, we could do that with Building B where all the flats were ripe for picking at good prices. I was also beginning to worry that we would overstretch our budget with Flat A and that it would be better to choose a much cheaper 3.5 flat in building B. Our mortgage would be sooo much cheaper with 250k less in debt!

Can you tell which flat which chose?

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The World of Neubau

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During my months of searching, I saw many, many types of houses and flats on my search sites… but I also saw many neubau (new build) objects in the listings. I was a little wary of neubau because I’ve read some horror stories about them on forums, but at the same time I was attracted by the offers available.

Image via Erstbezug.ch

The Bad:

  • Hidden costs snowballing
  • Asshole contractors with red tape
  • Delays
  • Cannot secure a mortgage until later, interest might go up

The Good:

  • First come, first serve: Minimal fighting to buy
  • Custom changes, options galore
  • More time to save for a bigger deposit
  • Everything is NEW

A few people have vented their frustrations with neubau online, so I had a pretty clear idea what we might expect if we go this route. People complained about buying a flat for one price and then paying lots of money on changes and having the flat cost a lot more than they anticipated.

I also heard a lot of complaining about the entire process of working with contracting firms. Some horror stories had contractors pressuring clients for a lot more money before they would finish and others had extreme delays that put the buyer out of home after their move-in date was postponed.

To be honest, it did seem like neubau is a headache from what I heard. Lots of people warned others to just not try and deal with it. So why did we keep looking?

Choice. By choosing neubau, we could totally avoid the vicious bidding wars on houses and flats in Switzerland. There would be no first, second and third round of bidding. If you want a neubau flat it is relatively simple: pay a fee to reserve, sign a contract and start paying your deposit.

In essence, all we had to do was decide on a flat before someone else did. Then the flat would be ours, no questions asked.

In addition to avoiding the war on ownership, we could customize a flat to meet our own preferences and needs before it was built and when we move in, everything will be brand new. Buying something totally new was a major selling point for Kay, who didn’t want to feel like he was downgrading if we moved out of our comfortable flat in Zürich.

We also calculated that if we would have until the flat was done to save for our mortgage, we would be able to pay a significantly larger deposit and therefore we could buy a bit more expensive flat than we would have been able to at the beginning of 2012. The risk was that when our mortgage would start in 2013, the interest rates may go up.

Neubau still sounded right for us, so while I kept searching for potential existing houses, I started focussing more and more on neubau projects.

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Shopping for houses

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Despite all the scary figures I mentioned earlier, I was confident that with our savings we would be able to buy some kind of modest flat and profit on this extremely low interest.

I spent hours on Comparis looking at houses and flats. We couldn’t afford anything besides a shoebox in downtown Zürich, but there were many flats outside the city and even entire houses that were possibly in our budget.

Having been raised in Switzerland, Kay had the notion that you don’t buy property unless you are 40 or have kids. (That’s not us.) It took some time to convince him that we don’t have to fit into the stereotype for buying to be an advantageous financial choice.

The big question was size and location. Sure, we could sort of afford a 6.5 room apartment (= 5 bedroom flat) or even a 7 room house complete with garage, basement, backyard and everything, but that would mean sacrificing on location.

We do like living in Zürich and realistically, in the next 20 years we will probably change our jobs a few times. With that in mind, we are not quite in a position to commit to a small town an hour and a half away from Zürich city by train/bus.

Who in their twenties wants to worry about catching the last bus back to the middle of nowhere at the end of the night? Not us.

We have to be close enough to Zürich that if one of us would have to get a job outside, we would not have an impossible commute. Buying a car to save on commute time would also kind of negate the “saving” aspect of buying a house.

So we started limiting the search to flats in the vicinity of Zürich city, under 20 minutes to the main station by train. I mean, we just don’t need a house right now. As much as I think it would be cool to have 5 bedrooms and build a photography studio, we just don’t need that much space right now.

I saw a few older flats that could possibly be contenders, but when Kay and I visited a 3 bedroom 80 sq m flat (861 sq ft) it felt cramped and although it was technically IN Zürich, it was kind of a crap neighborhood with nothing going on around it. It was depressing.

Kay was really unimpressed with the old interior and the smell of smoke and other places we saw had 30 year old windows or unfinished interiors that would all require possibly hundreds of thousands in repairs. Some had winter gardens (like an enclosed glass balcony) but no real balcony, aka no grilling. It was always something. And none of the locations were really spot on.

Some older flats also come with “Baurecht“, which basically means somebody owns the land your flat or house is on. They have a 20-100 year contract with people to rent this land from them to build on, and you might end up paying like 400-1000CHF a month just for renting your land. It’s a pretty unattractive detail and makes it hard to sell your house if you do get suckered into a deal like that. You’ll never pay 300CHF a month in mortgage costs if you’ve always got those bloody building rights to deal with.

With all this information, we just weren’t sure buying a fixer-upper or an older flat sounded like a good idea right now.

Up next, we discover Neubau!

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