The education system is helping to boost the market in a country where the Swiss Franc remains a go-to safe haven currency.
With interest rates in the country in negative terrirory since 2014,real estate has attracted interest from investors looking for a tangible asset that posseses the capability of delivering stronger returnss – according to the latest analysis from international real estate firm Knight Frank.
The analysis also revealed that the resident that work in Geneva showed a greater willingness to commute to the city from areas in the canton of Vaud such as La Cote, and even Lausanne where property prices and municipal taxes are comparitively lower.
Alex Koch de Gooreynd, head of Switzerland desk at Knight Frank, explained that resident buyers tend to have larger budgets and in recent months, interest has been the strongest within the $2mn to $8mn price bracket.
Another suggestion of the analysis was that the super prime market has also become polarised. From $20 mn to $40mn, vendors face stiff competition, making both pricing and a property’s condition critical. Anything above this demand remains stable.
While the Swiss Franc dipped against key currencies in the last year, it still remains strong by historic standards. Goorenyd said: “While this can influence buyer sentiment in all Swiss markets, buyers in the lakes tend to focus more on the long term gain and lifestyle benefits.”
“ Here, a property boasts year round appeal, offering summer by the lake whilst some of the top Alpine resorts sit within an hour’s drive. Non-residents are largely confined to ski resorts as well as the immediate areas surrounding Montreux, Lugano, Interlaken and Lucerne.” he added.
In the areas where non-residents can purchase a home, they can only buy a single property where the official living space does not exceed 200 square meters. However, buyers still need to be aware of the Lex Weber law, which plaves a 20% cap on second homes in key commues, according to the report.
Swiss residents on the other hand, face less restrictions on where or what they can purchase, although non-European passport holders are restricted to one primary residence. Resident buyers tend to have larger budgets and usually a clearly defined search area.
Despite the demand in recent months being the strongest withing the $2 mn and $8 mn price bracket – the previous upper end of the price bracket would have extended to $10 mn. This has reduced slightly. Partly because of the more stringent assesment of lump sum taxation, which came into force on January 1 2016.
The budgets of non-resident buyers are significantly lower at around $1mn to $4mn, according to the report. Most buyers make their first acquisition at this price, and then gradually increase their investment over time, when they have familiarised themselves with an area.