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Today is a good day for real estate agents. The National Council has surprisingly said yes to the demand that buying your own house should be easier again – thanks to money from the pension fund.
Emptying one’s own pension fund assets to buy one’s own home was possible earlier, namely until 2012. However, the Competition Commission put a stop to this possibility in the wake of the global financial crisis. Since then, only half of the personal money required to buy a property can be paid from the pension fund.
This guarantees that house buyers have enough equity to be able to pay off the house even in the event of financial crises and rising interest rates. And not suddenly find yourself without a house and without a pension fund and have to be supported by the state in old age.
paternalism should end
In the meantime, however, real estate prices have reached unpredictable heights. It is now almost impossible for young families to buy a house, argue the SVP, FDP and Green Liberals. You want to make your entire personal assets in the pension fund available for home ownership again. After all, the pension fund money belongs to the people and it is at least as safe to invest in a home as in an occupational pension.
The current conditions are blatantly unfair: While people are not allowed to buy a house with their own pension fund money, the pension funds are investing exactly this money in huge new building developments and real estate projects with expensive rents. This is how the pension funds drive up the prices – with the money of the people who, by the way, can no longer afford an apartment themselves.
More risk – or even fraudulent procedure?
The National Council agreed to this line of argument with a narrow majority of ten votes. However, this means that politicians are taking an increased risk. There is often just enough money when buying a house – for example, the savings of spouses are added together.
If there is a divorce or another life crisis, the worst case scenario is that the house has to be sold for less than its value. If mortgage interest rates rise again after the current phase of low interest rates, there is even a risk of a whole wave of involuntary house sales.
The Greens, SP and Center are afraid of this scenario. The majority of these parties would like to leave the rules for pension fund money as they are now. Some parliamentarians even speak of a fraudulent approach by the real estate lobby: since people can no longer afford the expensive rents, they are encouraged to use their pensions to buy even more overpriced apartments. But when they get older, they don’t have that money.
Other political hurdles
The vote in the National Council was only the first in a whole series of political hurdles. If the Council of States also agreed, the matter would first go to the Federal Council this year, which would then have to draw up a legislative proposal. And this then comes again into both chambers of parliament, where it can be disheveled again. So if you want to plan all your pension fund money for a house purchase, you have to be patient for a few more years – at least.