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Residential property prices in Switzerland remain consistently high

The “Residential Properties Market Report Switzerland 2019”, just published by Engel & Völkers, examines the development of property prices and emerging trends in around 50 locations. “Prices for residential property in Switzerland remain stable. Buyers value the security this brings, which is reflected in the high level of demand in many places,” said Thomas Frigo, Managing Director of Engel & Völkers Wohnen Schweiz AG.  

Puigcerdà - This exclusive villa in the municipality of Sorengo, about 10 minutes’ drive from the centre of Lugano, is set on a plot spanning some 1,000 square metres. The property itself extends over three main levels, with a top attic floor and a heated pool. (Image source: Engel & Völkers Lugano)

Economic hubs still very much in demand

High prices were reached for residential property in Switzerland’s economic centres in 2018. The frontrunner here with the highest entry prices in the top locations was Zurich. In Switzerland's largest city, a high quality of life is coupled with a low rate of new construction. The most expensive residences in the city are located in the Zürichberg area. The lower price limit for villas here was 6.5 million Swiss francs (approx. 5.7 million euros) and 17,500 Swiss francs (approx. 15,400 euros) per square metre for freehold apartments. There was especially strong demand for historic properties in an art nouveau or Bauhaus style.

In central Switzerland, Zug draws both national and international clients due to its low rate of taxation compared with the rest of the country. The best locations in the Zugerberg area and in municipalities such as Risch, Hünenberg or Ägeri afford mountain and lake views. Prices for villas here started at 4.4 million Swiss francs (approx. 3.8 million euros), while the entry price for freehold apartments was 12,500 Swiss francs (approx. 11,000 euros) per square metre.

Geneva is also a highly desirable place to live in Switzerland, with its location on Lake Geneva. In its premium locations, villas fetched entry prices in 2018 of 4 million Swiss francs (approx. 3.5 million euros). Freehold apartment prices started at 9,000 Swiss francs (approx. 7,900 euros). Buyers were looking for properties with a spacious, open plan living and dining area, an exclusively fitted kitchen and modern technical standards.

High level of demand in holiday destinations

“Switzerland recorded an increase in overnight stays of almost four per cent in 2018. This rise was due in part to the well-known Swiss holiday resorts in the mountains and in lakeside settings,” said Thomas Frigo. In the top locations in the exclusive ski resort of Gstaad, prestigious villas and chalets reached property prices starting at 25 million Swiss francs (approx. 22 million euros) last year. In the same period, the prices per square metre for freehold apartments were in excess of 40,000 Swiss francs (approx. 35,300 euros). Increasing numbers of younger, international buyers are being drawn by the high quality of life here and investing in properties in the Oberbort area of Gstaad, around the resort’s pedestrian-only promenade and in Saanen with its historic village centre.

Demand for holiday homes in St. Moritz is also strong and prices here remain high. Since the “Lex Koller” legislation was temporarily suspended in the municipality in 2017, foreign buyers are now also able to acquire a second home in St. Moritz. Detached residences and chalets in prime locations, built in the recent past and with exclusive amenities, were especially sought-after among both Swiss and international buyers. Such properties cost upwards of 6 million Swiss francs (approx. 5.3 million euros) in 2018. Freehold apartments changed hands from prices per square metre of 18,000 Swiss francs (approx. 15,900 euros).

Ticino is known for its mild climate and Mediterranean flair. The prospect of a secure capital investment and a good return on resale attract national and international buyers to Ascona on Lake Maggiore. Residential properties with direct lake access or lake views proved particularly popular. In the premium locations, property prices for such homes began at 7 million Swiss francs (approx. 6.1 million euros), while the lower price limit for freehold apartments was 15,000 Swiss francs (approx. 13,200 euros) per square metre. In nearby Lugano on Lake Lugano, villas and chalets in prime locations also reached entry prices of 7 million Swiss francs, with freehold apartments fetching upwards of 12,000 Swiss francs per square metre (10,600 euros).

Outlook: Property price increases expected in Switzerland in 2019

Real estate remains an attractive acquisition for investors due to the limited number of investment opportunities available. Engel & Völkers expects the positive development of the Swiss residential property market to continue in 2019. In the segment for detached residences, the company forecasts price rises of around 1.2 percent due to the excess demand. Engel & Völkers also anticipates slight price increases in the freehold apartment segment.

Other trends relating to purchase power and property prices in Switzerland can be found in the full “Residential Properties Market Report Switzerland 2019”.

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