Tag Archives: swiss
Index report shows Swiss property markets provided strong growth for investors in 2015
Switzerland’s property markets are currently providing strong growth for investors with the latest data showing total returns of 6.6% in 2015. This was up from 5.2% in 2014, which the index report from investment support tools firm MSCI says reflects continued strong growth in the Swiss properties sector. It also says that the strength of Swiss property market signals that the sector benefited from the Swiss National Bank’s (SNB) move last year to scrap the franc’s peg to the euro and lower interest rates. The figures showed that government bond yields and property yields both declined in 2015 from 2014, to -0.04 from 0.38%, and to 4.4% from 4.8%, respectively. The spread between the government yield bonds and property yields increased to 4.45% in 2015 from 4.4% the year before. The strong total return was fuelled by robust capital value growth, which rose to 2.4% from 1% in 2014. This capital value growth marks the second highest growth in the three, five and 10 year average. Residential properties remained the strongest sector in 2015, representing 47% of the measured universe in the index. Total return in this segment rose to 8.4% from 6.1% from the year before. The capital value growth in residential properties reached 4.1, marking the best performance since the index began. Moreover, office property returns recovered in 2015, achieving total return of 5.0%, compared to 4.2% in 2014. However, office property total returns remained below the five year average of 5.1%, and the 10 year average of 5.8%. Across the different sectors, rental growth weakened slightly. Net income return dropped to 4.1%, from 4.3% in 2014. ‘The Swiss property market enjoyed another robust year as the market continues to attract capital. The strong capital growth is a result of increased yield compression following investor demand. This is especially true for the major cities of Switzerland, such as Zurich, Bern, Basel or Geneva,’ said Justus Vollrath, MSCI executive director. ‘What’s particularly interesting is that the move by Swiss central bank to unpeg the Swiss franc and lower interest rates led to slight widening of spreads between government bond yields and property yields. This created an additional incentive for investors,’ he explained. ‘We also see that the residential market showed particular resilience and enjoyed exceptionally strong capital value growth,’ he added. Continue reading
New analysis shows that demand for property in the Alps is rising
Demand for Alpine property is rising, spurred on by a more resilient Eurozone, greater clarity over tax and the second home cap in Switzerland, as well as a weaker euro, says a new analysis report. The latest results of the Knight Frank Prime Ski Property Index underline a broadly stable market environment with only 13% percentage points separating the strongest and weakest performer. Val d’Isere and Meribel lead the 2015 Ski Property Index recording annual price growth of 5.8% and 4.5% respectively Prime sales activity in the French Alps is focussed between €1.5 and €2.5 million with resorts such as Chamonix and Courchevel 1550 increasingly popular . Indeed, the number of sales completed in Megeve in the first half of 2015 was double the number of sales agreed during the whole of 2014 while previous uncertainty in the Swiss market is giving way to renewed optimism as clarity emerges surrounding taxation and the second home cap. The report points out that currency movements have played a pivotal role in determining demand across the region. For many, having decided to buy a ski home, choosing where to buy and weighing up the pros and cons of the different ski resorts can be a challenging task. The report also points out that Swiss rules on who can buy what, and where, can be complex for even the most experienced property lawyer due to the rules for residents and non-residents according to Lex Koller and Lex Weber. Home to the world’s oldest ski resorts, the French and Swiss Alps attract in excess of 80 million ski visits per annum and account for a third of the total number of ski resorts worldwide. In the past year ski homes in Europe’s top resorts have continued on the same trajectory that they have been following since 2008 with no radical acceleration or deceleration just small single digit shifts year on year. Overall, the index proved largely static with only a marginal 1% fall recorded in the year to June 2015. Val d’Isere and Meribel lead the 2015 rankings with the price of a typical four or five bedroom chalet in each resort rising by 5.8% and 4.5% respectively in the year to June. The report explains that the length of Val d’Isere’s ski season explains its long- standing appeal, particularly with British buyers. Few other Alpine resorts can guarantee sufficient snow to ski during both the Christmas and Easter holiday periods. In Meribel’s case, a combination of its location in the heart of The Three Valleys and its pricing explains its 4.5% increase year on year. Meribel provides better value than Courchevel 1850, but can compete with 1550 and 1650 in terms of facilities. Investment in the form of new residential developments such as Olympe in Les Allues and Point de Vue in Meribel Village has also helped to build confidence amongst buyers, the report explains. In real price terms, the exclusive resorts of Courchevel 1850… Continue reading
Property market recovery in the Alps spreads out from top resorts
The recovery in the Alpine residential real estate market, led by the ultra-prime resorts, has spread to the rest of the region with infrastructure investment spurring new development, according to a new report. British buyers are returning as a weak euro poses buying opportunities in France, Austria and Italy but a strong Swiss franc has made property in Switzerland more expensive for foreign buyers, says the report from Savills World Research and Alpine Homes. Courchevel 1850 tops the Savills ultra-prime ski resorts index with typical prices of €31,340 per square meter for the best properties. The French resort is followed by the Swiss resorts of Gstaad, St Moritz, Zermatt and Verbier at between €26,450 and €31,220 per square meter. In spite of limited price growth, a strong Swiss franc has pushed these markets up the rankings in currency terms, the report explains. In North America, only Vail is on par with the top European competition at €25,200 per square meter. ‘A home in a top tier Alpine resort is a key component of global property portfolios for the world’s wealthy. A property in Courchevel 1850, Gstaad or St Moritz complements a city residence in London, Paris or Moscow,’ said Paul Tostevin, associate director of Savills World Research. According to Jeremy Rollason, managing director, Alpine Homes, 2015 has been a tale of two currencies for UK buyers in the Alps. ‘The de-peg of the Swiss franc caught markets off guard, but sterling has since recovered and now trades within a 5% range of the pre-January 2015 exchange rate,’ he said. ‘The weakening euro has helped buyers in euro denominated countries. Currency swings have the effect of either suppressing or stimulating markets through affordability, but the net effect has little influence on property values per se,’ he added. The report shows that buying activity in the Swiss resorts cooled in 2015 with foreign buyers, particularly important to the top end of the market, impacted by the strong Swiss franc. However, despite limited supply of second homes, investment in infrastructure continues and the cache of Swiss resorts remains. Grimentz gained a new lift in the 2014/2015 season linking to neighbouring Zinal and new apartment schemes have followed. La Tzoumaz is also set for revival thanks to a planned lift upgrade, improving connectivity with neighbouring Verbier. Villars, a year round resort with high quality international schools, has seen high levels of new supply in recent years and has suffered from poor snowfall. This has had some impact on pricing and, for those who shop around, there are deals to be done. Prime apartments here trade at between CHF10,000 and CHF12,000 per square meter. The Austrian Alpine resort market has remained strong on the back of a vibrant local economy, which has generated house price growth nationally of 41% since 2008 and the report says that Austria continues to offer excellent value for money compared to the more established French and Swiss resorts. Committed investment in resort… Continue reading
