Residential property in Switzerland: Prices remain high in the premium segment

Residential property prices in Switzerland continue to remain stable. This is documented in the latest Engel & Völkers “Residential Market Report Switzerland”. “Prices for homes were unwaveringly high in Switzerland in 2017 in the majority of cases. In the final months of the year we even registered moderate price rises,” said Thomas Frigo, Managing Director of Engel & Völkers Wohnen Schweiz AG, adding: “For 2018 we anticipate an ongoing high level of new construction activity.”

High demand in key economic centres
Among Switzerland’s centres of finance and commerce, the highest entry prices for residential properties in top locations were reached in Zurich. One reason for the excess demand in the past year was the attractive interest rate level that incentivised many tenants to look for a property for private ownership. With an entry price of 5.5 million Swiss francs (approx. 4.7 million euros) for mansions and a price per square metre starting at 18,000 Swiss francs (approx. 15,500 euros) for freehold apartments, Zürichberg was the highest priced location in the city. Absolute top prices were fetched here for refurbished old properties with unobstructable views. Sought-after premium locations in the Zurich region also include Küsnacht and Zollikon on the so-called Gold Coast, areas close to the city centre, and municipalities along the left bank of Lake Zurich.

Economic centres in central Switzerland such as Lucerne and Zug also witnessed a high level of demand last year. As a result, the availability of real estate and the vacancy ratio for detached properties in the region was considerably lower here than the Swiss national average. The highest prices for residential property in central Switzerland in 2017 were registered by Engel & Völkers in Zug. The entry price here for mansions in the top segment was 4 million Swiss francs (approx. 3.4 million euros), with prices per square metre for freehold apartments starting at 12,500 Swiss francs (approx. 10,800 euros). The most expensive addresses in the city include the Zugerberg with views of Lake Zug, as well as the Ennetsee municipalities such as Cham and Risch. Detached mansions and loft apartments with lake and mountain views were in especially high demand.

Penthouse_Walchwil(c)Engel & Völkers Zug Anwesen_Arlesheim(c)Engel & Völkers Basel-CityLucian Hunziker Chalet_Gstaad(c)Engel & Völkers Gstaad

Basel also ranks among the most popular places to live and work in Switzerland. The city has seen extremely positive economic development, particularly over the last few years. The local real estate market currently features a large number of high-end new developments and conversion projects. The most expensive residential areas of Basel include the Neubad-Quartier, the Altstadt Grossbasel and the municipality Riehen. In these prime locations, mansions sold in 2017 for upwards of 2.5 million Swiss francs (approx. 2.2 million euros) and the price per square metre for freehold apartments began at 10,500 Swiss francs (approx. 9,000 euros).

Holiday destinations remain highly desirable
Holiday resorts remain among the highest priced destinations in Switzerland. In prime locations in the renowned ski resort of Gstaad, for example, prices for exclusive mansions and chalets in 2017 started at 16 million Swiss francs (approx. 13.8 million euros). Prices per square metre for freehold apartments during the same period exceeded 35,000 Swiss francs (approx. 30,100 euros). Due to the second home initiative also known as the “Lex Weber” regulation, the building of new apartments for use as holiday properties is restricted in Gstaad. In future, new developments here will therefore increasingly be focused on the first home market.

Sustained demand in St. Moritz resulted in consistently high property prices. Chalets and mansions in the most desirable locations reached sale prices starting at 6.2 million Swiss francs (approx. 5.3 million euros) in 2017. Freehold apartments in very good locations such as the Suvretta-Hang, St. Moritz Dorf and municipalities like Sils and Silvaplana achieved prices per square metre from 20,000 Swiss francs (approx. 17,200 euros). Last year the “Lex Koller” legislation was temporarily suspended in St. Moritz. Since then, foreign buyers too have been able to buy second homes with a maximum gross interior area of 250 square metres without restriction. “We think it is highly likely that other municipalities in the Engadine region will follow the example of St. Moritz here,” said Thomas Frigo.

Villa_Celerina(c)Engel & Völkers St. Moritz Villa_Ascona(c)Engel & Völkers Ascona Eigentumswohnung_Morcote(c)Engel & Völkers Lugano

A Mediterranean flair and mild climate make the canton of Ticino one of the most popular holiday regions in Switzerland. Increasingly, young Swiss families are looking to acquire a second home here. The most sought-after locations in the region include Ascona on Lake Maggiore and Lugano on Lake Lugano. In Ascona, properties with lake views or direct lake access were especially sought-after in 2017. This calibre of mansion in premium locations had entry prices of 7 million Swiss francs (approx. 6 million euros) and prices for freehold apartments began at 15,000 Swiss francs per square metre (approx. 12.900 euros). In Lugano, around 40 kilometres away, the entry price for mansions in the top segment was 4 million Swiss francs (approx. 3.4 million euros), while freehold apartments changed owners for prices per square metre starting at 10,000 Swiss francs (approx. 8,600 euros).

Outlook: Market set to remain stable in the longer term
Real estate continues to be a popular investment with buyers due to a lack of other investment opportunities. Engel & Völkers therefore expects the stability of Switzerland’s property market to continue over the course of 2018. The company forecasts slight price rises both in the segment for detached homes and for freehold apartments – primarily for smaller homes away from the very best locations. The highest price rises in the freehold apartment segment are anticipated in central Switzerland, at approx. 1.5 percent. In absolutely prime locations, Engel & Völkers is very confident that top prices will continue to be reached in future for prestigious properties.


Link to the complete “Residential Market Report Switzerland 2018”

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