swiss property market

The Swiss property market is one of the most sought after for its robust growth in years. Many investors choose to put their money in Switzerland because of the country’s stable economic situation and its neutrality. The country’s excellent performance is mainly due to its service sector and innovative small to medium enterprises. Similarly, the unemployment rate in the country reached a new low at 2.4% in August 2018, according to the Swiss State Secretariat Office (SECO). 

The Switzerland Housing Market at the Present

Surprisingly, most of the Swiss population are renters. The low number of single-family homes and their associated costs discourage homeownership. Compared with other European countries, Switzerland is made up of 63% renters, mostly owned by institutional investors like pension funds and real estate companies. 

The Swiss market limits homeownership because of several factors such as a 20% deposit, a marginal annual increase of 1% to 2% in property values, and an increase in the amount subject to significant taxation depending on the length of the property. All these factors make the Swiss market unattractive to short-term investors. 

For the past two to three years, the values of high-end properties decreased by 12% while the low-end homes rose by at least 7% to 10%. Still, many of these prices vary widely from canton to canton and from region to region. The differences arise from the competition in the available stock, which can result from foreign companies in more urbanised areas with high-salaried employees. 

Looking at the status of the property market in Switzerland, the vacancy rate can be used as a valuable indicator for local, regional, and cantonal markets since it can offer useful insight into how the market is doing in terms of availability of housing inventory. For comparison, the healthy housing market has a vacancy rate of 5%. In Switzerland, it is currently at 1.45% overall, but major cities have lower rates. In Basel, for instance, the vacancy rate is now at 0.47%, which causes a general price increase in the remaining inventory. 

Furnished Apartments in Switzerland

Short-term furnished apartments in Switzerland depend on the season, most notably in cities that often hold critical international events such as BaselWorld in Basel or the Salon de l’Automobile in Geneva. Activities such as these cause a temporary decrease in availability and increase in property prices weeks leading into the occasion. 

Price Changes in the Last 10 Years

In the past decade, the Swiss market generally have increased property prices. Here are the per cent price changes in the following cities:

Zurich had the most significant price change from 2007 to 2018 at 97%, closely followed by its neighbouring town of Horgen, which posted an increase of 89% during the same period. Werdenberg, which is only an hour drive away from Zurich, also posted a rise of 88%. Neuchatel, about 94 miles away from Zurich, famed for its gastronomic experiences and an old town feel recorded an 80% price change in the last ten years. The cities of Basel-Stadt posted a 50% increase while La Gruyere and Geneva both posted 45% price changes. A decrease in prices was noted in Albula and Goms, posting -4% and -2%, respectively. 

The Swiss property market remains an ideal property investment, particularly for long-term investors who do not like to deal with short-term volatility. 

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