Taylor Scott International News
Switzerland has seen sustained levels of residential property market growth between 2008 and 2013 with house prices up 28%, the opposite of what has happened in many other European markets. Economic expansion, low interest rates, growth in real wages and immigration of wealthy individuals have all supported housing demand. The strengthening Swiss franc also raised their price in comparison to other currencies, according to a new analysis from international real estate firm Savills. However, price growth is now slowing, amid government efforts to cool the market by introducing stricter lending requirements. ‘The decoupling of the Swiss franc with the euro has seen its value appreciate and make Swiss exports more expensive, slowing the economy in general. Foreign buyers with Swiss franc denominated mortgages have been especially hit,’ said Yolande Barnes, director of world research at Savills. The report points out that Switzerland has one of the world’s strictest citizenship systems. Qualification requires 12 years of permanent, legal and notated residency, fluency in one of the official languages and integration into Swiss culture and community. On top of this Switzerland introduced new quotas for European Union citizens in 2013. Foreign buyers are also heavily restricted on residential property purchase with just 1,500 permits released a year, although the rules vary significantly by Canton. In Geneva the emphasis is on the rental market with some 80% of the population of the city doing so and the rental market is strongly pro-tenant, the report explains. ‘Geneva is an expensive city in which to live and there is especially strong demand for city centre apartments which are in short supply,’ said Barnes. Demand is fuelled in part by employees of the finance and business services sector on generous relocation packages, the report shows. Property prices in Geneva have grown 55% since 2006, compared to 27% across Switzerland. ‘These rates of growth are echoed in the rental market. High prices have put property purchase and even rent out of reach of many locals in Geneva, which counts itself alongside Zurich and Zug as one of the most expensive locations in the country. Each day 90,000 workers commute from neighbouring France to the city, a number that has doubled over the last decade,’ Barnes explained. ‘For those who can afford it and, non-nationals who can obtain a permit to purchase, Geneva offers attractive property in a safe, secure environment. The most desirable property enjoys lake or mountain views,’ she added. The report also looks at what is happening to property prices in the Swiss Alps which attract second home buyers from across the globe. The Swiss Alpine resorts of Gstaad, St Moritz, Zermatt and Verbier are among the world’s most exclusive, and expensive, with ultra-prime prices ranging from €20,000 to €30,000 per square meter. The report explains how these resorts have diversified beyond skiing to cater to many of the other demands of the super-rich. Designer shopping, Michelin starred restaurants and polo are all part of the offer. These… Taylor Scott International
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