Property in Switzerland is currently seeing some of the fastest growth in the world. At the moment as most of you will know that is not really saying very much. However, the fact that we can use the world fastest and growth in the same sentence really says it all anyway. While property markets around the world were crashing like cymbals (both in the degree of their fall and the dramatic effect) Switzerland property prices have continued to rise. According to Knight Frank’s index, on a quarter by quarter basis, Swiss property prices grew 0.7% in Q3 2008, and 1.2% in Q4. The growth has continued this year, with a 2.1% growth in Q1 and 2, and a growth of 1.5% in Q3.This means that Swiss property is currently worth about 7% more than it was a year ago and not many property markets in the world can say that!
Switzerland made the news earlier this year, when it brought its banking sector in line with international laws over money laundering, and brought its removal from the tax haven list. One would expect this to weaken its banking sector by reducing reserve and deposit levels, but there was obviously method in the madness. Undoubtedly the banks sought to regulate the sector in the hope of increasing investment.
Why invest in property in Switzerland?
Switzerland is well known for offering an exceptionally high standard of living and giving a superb quality of lifestyle plus it has an exemplary education system and health facilities. It goes without saying it is one of the world’s most durable economies and it is politically safe. Located right in the heart of central Europe it has become the home of the affluent and the beautiful people with many a familiar face from the world of music and countless famous actors and actresses setting up residence there. All year round entertainment includes bustling summers and winter wonderlands to keep even the restless happy. It is no wonder that making a property investment here is considered a wise move for various reasons. The lifestyle alone brings a feeling of well being and stability in not only a beautiful environment but a safe one too, plus the quality in workmanship of properties in Switzerland including superior fixtures and fittings are incomparable to anywhere else in the world. Adding to this investing in Switzerland gives the investor peace of mind that the country operates with honesty and integrity thus removing any concerns the foreign buyer may have. In general, foreign investors take their time before buying in Switzerland, there is no doubt they love the lifestyle and the beautiful landscapes however they usually stay in the country for a while before taking the plunge to invest. The wealthy foreigners prefer to invest quickly as they see the lucrative market before them snapping up property as soon as it comes on to the market.
The inevitable next question is, is it a good time to buy a property in Switzerland now?
Zurich and Lake Geneva remain the two most popular and I may add the most expensive areas to invest in Switzerland properties and the property prices remain high and show no signs of slowing down. Interestingly, only 33% of the population in Switzerland own their own homes compared to 46% in Germany, 52% in Austria and 65% across the rest of Europe as a whole. However, we are currently seeing more Swiss nationals and foreigners opting to buy real estate in Switzerland preferring to invest rather than rent so they can eventually look forward to yielding a good return in the future ensuring a good long-term investment with continuous growth prospects. Swiss nationals tend to buy a “forever property” preferring not to move around frequently and as the property prices have been rising steadily since 1988 it’s a valid reason that once bought it’s better to stay put. It is most certainly a seller’s market now as the demand for property is higher than the current supply which means inflated prices tells us it’s a perfect time to sell. Nevertheless, it is also a good time to buy with the lowest interest rates recorded offering attractive low repayment options and the forecast for low-interest rates to continue are on course for at least another year and probably longer.
Is it possible for a foreigner to get a Swiss mortgage?
Yes, it is possible for a foreigner to get a Swiss mortgage as Swiss banks usually offer mortgages up to 80% of the market value, which means all you need to find is just a deposit of 20%. As usual the higher the deposit you can give the lower the monthly mortgage payment you have to make. Over the past ten years, the interest rate has fluctuated slightly between 2.5% (the lowest rate) and 4.5% (the highest rate). This stable market is due to several factors, the small population in Switzerland, a higher rate than normal of domestic savers and a high level of foreign deposits (large deposits).
Who invests in real estate in Switzerland?
The average buyer has disposable income and they prefer to make a lifestyle choice which will enhance their time away from work. These are usually holiday home buyers maybe they like to ski and want to invest in a luxury ski chalet or they love the outdoor life in this beautiful country. If the investor buys a ski apartment for example for an investment by way of rental returns, then what a great choice they have made to buy a ski property. Skiing and snowboarding are growing more popular by the day and renting a ski property is the popular choice for holidaymakers it gives freedom of movement, space and privacy. Then we have the lucky investors who choose to make Switzerland their home they want to live in a scenic setting and a safe environment in a stable country that has plenty to offer its residents. They wish to socialise with like-minded people and prefer to shop at designer boutiques and brand named shops, they want the finer things in life.
Therefore our current conclusion is that it is a good a time to buy Swiss property now. Choosing the best location is vital; however, opt for a new and modern property that is suitable for a “forever home” and you should make a solid investment for the future. Whatever happens in the banking sector Switzerland property has proven itself as one of the safest buys on the global market, and it can only become more popular because of its strength during this difficult climate.