Residential property in Switzerland: Consistently high prices in top locations, rising prices in peripheral locations

Price trends for residential property in Switzerland developed differently from region to region in 2016. In the sought-after prime locations, sale prices stabilised at a high level. “By contrast, peripheral locations on the edge of urban centres with good infrastructural links and moderate property prices are increasingly catching up,” said Thomas Frigo, Managing Director of Engel & Völkers Wohnen Schweiz AG. These and other general market developments have been analysed by Engel & Völkers in its “Residential Market Report Switzerland 2017”.

Economic centres: Property prices in premium locations unwaveringly high

Demand is particularly strong for property in Switzerland’s economic centres. The city of Zug is one example here, attracting buyers with its setting on the banks of Lake Zug and its many hillside addresses with lake views. With top prices of up to 28,000 Swiss francs per square metre (approx. 26,200 euros), Zug recorded the highest prices for freehold apartments in 2016 compared to all other major economic regions in Switzerland. For detached properties in very good locations such as the Zugerberg, entry price began at 4 million Swiss francs (approx. 3.8 million euros).

The many multinational corporations and the international airport make Geneva a desirable place to live and work. The city’s most expensive residential areas include Rive Gauche, Cologny and Cité. In these prime locations, freehold apartments reached top prices per square metre in 2016 of up to 25,000 Swiss francs (approx. 23,400 euros). The entry price for detached properties here was 3 million Swiss francs (approx. 2.8 million euros). In addition to its status as an economic centre, its location on Lake Geneva and its many green open spaces also account for the city’s popularity.

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The Swiss financial centre Zurich also has an international flair, as well as plenty of recreational pleasures to offer thanks to its many designated areas of natural beauty and its location on Lake Zurich. The most sought-after residential addresses include the Zürichberg, the Old Town and the trendy quarters Seefeld and Enge. Buyers paid up to 20,000 Swiss francs per square metre (approx. 18,700 euros) for exclusive freehold apartments in 2016. Sale prices for detached properties and villas started at 4 million Swiss francs (approx. 3.8 million euros). Wealthy buyers continue to be drawn to the right-hand banks of Lake Zurich – to the so-called Gold Coast, where prestigious homes also fetched very high prices.

Holiday regions: Increased listings now available to international buyers in St. Moritz

Holiday destinations – and ski resorts in particular – rank among the most sought-after and highest priced residential locations in Switzerland. Freehold apartments in the renowned ski resort Gstaad witnessed top prices in 2016 of as much as 65,000 Swiss francs per square metre (approx. 60,800 euros). Entry prices for detached family homes and villas started at 20 million Swiss francs (approx. 18.7 million euros). Exclusive chalets here with unique views over the centre of Gstaad and the surrounding mountains are exceeding desirable.

As the venue for international ski races, St. Moritz is one of the top locations for second homes in Switzerland. Freehold apartments at prime addresses like the Suvretta-Hang and central addresses like Via Tinus and Via Brattas reached prices per square metre of up to 28,000 Swiss francs (approx. 26,200 euros) in 2016. Detached properties in prime locations cost upwards of 8 million Swiss francs (approx. 7.5 million euros). In some Swiss holiday resorts, the so-called Lex Koller law regulates the acquisition of second homes by international buyers. After a resolution by the local council on 26 January 2017, St. Moritz has temporarily suspended this law for the period 2017 and 2018. As a result, second homes with a gross floor space of up to 250 square metres may also be acquired by foreign clients without any restrictions imposed. “It remains to be seen whether other municipalities will follow this example,” said Thomas Frigo.

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Popular residential and holiday locations can also be found in the southern canton of Ticino. The towns of Ascona on Lake Maggiore and Lugano on Lake Lugano impress with their picturesque scenery and mild climate. The highest prices were fetched here in 2016 for properties with direct lakefront locations or with lake views. Prices per square metre for freehold apartments in Ascona reached up to 22,000 Swiss francs (approx. 20,600 euros). In Lugano, top prices per square metre were 20,000 Swiss francs (approx. 18,700 euros). Sale prices for detached properties and villas in prime locations started in 2016 at 7 million Swiss francs (approx. 6.5 million euros) in Ascona and 4 million Swiss francs (approx. 3.8 million euros) in Lugano. The growing number of national and foreign buyers is ensuring a high level of stability on the market for properties in absolutely prime locations.

Outlook: Gradual price rises expected to continue

Engel & Völkers anticipates that the residential property market in Switzerland will remain stable in the coming years. The slight increase in demand for residential real estate will most probably lead to modest price rises, particularly for smaller properties aside from the prime locations. The trend towards “buy-to-let” properties as capital investments in the freehold apartment segment is also set to continue in light of the ongoing low-interest-rate policy. This type of property now accounts for as much as 30 percent of all newly-built apartments purchased. Furthermore, the high level of new construction activity is destined to increase the availability of properties in the rental segment. 

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