Real estate in Switzerland: the advantages of the market
During the pandemic, the world economy struggled, not all countries were able to recover quickly and maintain stability. Many segments were affected, including the stock market, and an atmosphere of uncertainty prevailed on the global market, with yields plummeting. In order not to lose money, investors decided to allocate capital to other assets. Despite the crisis, real estate in Switzerland remained a stable option for investment. Due to this growth and demand in the segment remained high all the time, and the same dynamics is observed today.
The activity in the Swiss real estate market is supported by both local and foreign investors. According to statistics from the consulting company Wüest Partner, last year apartment prices in the country increased by 5.1%, homes increased by 5.4%.
The main advantage of the real estate market in Switzerland is its stability. In addition, a flexible tax system simplifies the transactions for foreign investors, which is also considered a huge plus compared with markets in other European countries. However, there is a significant disadvantage of the segment – the regular growth of prices, which makes the purchase of local housing unaffordable for many wishing to buy. Do not save even the low interest rates offered by Swiss banks. In order to regulate the market, the Swiss government has introduced a number of restrictions for foreign buyers. It hopes that such measures will prevent the rise in cost and make the purchase of housing more affordable for the local population.
Experts say that the pandemic has had little effect on the segment, primarily due to the fact that investors from the securities sector have redirected funds in real estate as a more reliable asset.
In total, Switzerland’s GDP decreased by 3.3% in 2020, which is considered a good result compared to other countries in Europe. In 2021, the economy managed to recover and show growth. The good progress is attracting a large number of foreign investors who are willing to invest in the local market. Real estate market is developing, banks are actively financing the residential sector, which increases the demand for facilities.
Remote work promotes the purchase of new apartments and houses. People want to expand their living space and make it as comfortable as possible for their professional activities. There is a growing share of buyers who buy country houses as second homes.
Under restrictions from the government, foreigners can buy only real estate located in resort areas, including St. Moritz, Lake Lucerne. If, however, they want to invest in properties in Zurich, Lake Geneva and other regions, they must make it their primary residence.