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Main Trends of the Swiss Real Estate Market in 2020

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The Swiss real estate market is definitely can be called unique. And the crisis situation in 2020 is another confirmation of this. The lockdown has stopped the activity for a while, however, after the easing of restrictions different market segments continued to develop. And so far, nothing suggests that customers can expect discounts.

A Quick Overview of the Market

Experts from the Swiss financial services company Credit Suisse has studied the situation in three main sectors in the market of residential real estate under construction in Switzerland. Namely: single-family homes, condos and apartments for rent. Today, there are multidirectional trends, but this picture was laid down by their long-term development.

The number of approved building permits for various housing segments. Apartments for rent are shown in red, condos are shown in green, and single-family homes are shown in blue. Source: Baublatt, Credit Suisse

As we can see, the rental real estate segment has a long-term growth trend, while the number of permits for the construction of single-family homes and condominiums has been simultaneously decreasing over the same period.

Ksenia Sorokina
Expert
Moscow Sotheby’s International Realty

Indeed, we see an increase in demand for investment in real estate in Switzerland. Today this is the safest way to save capital. The real estate market in Switzerland is one of the most stable and popular, which is why the current situation with the pandemic has not affected it much.
Some developers have slightly delayed the start of construction of new facilities, this trend is observed in many European capitals. As for the issue of construction permits, we see a slight decline at the beginning, but everything has been working in a stable mode since July. Some developers have decided to postpone the start of construction until the 4th quarter of 2020, but these are only individual cases.

Apartments for Rent

Volumes are recovering quickly

The first quarter of this year was marked by a general decline in all sectors. However, in the rental segment it was temporary. Although the number of building permits fell by 21% compared to the previous quarter, most of this decline was offset by a 15% increase in the second quarter. At the same time, the indicator increased significantly compared to the second quarter of 2019 by 12%.

From a technical point of view, some Swiss real estate companies were ready to work remotely, which softened the blow to the economy. "The Swiss government was one of the first in Europe to lift the quarantine, so the situation in 2020 had a minimal impact on the economy," adds Ksenia Sorokina.

One of the main reasons for this increase was that applications for the design of large projects submitted at the end of 2018 and during 2019 were only recently approved.

If you look at the actual design applications, their number in the segment of apartments for rent has also increased. However, the decline lasted a little longer in this area, and the trend remained negative in the second quarter. Since may, the number of design applications submitted has already been above average: the coronavirus factor has weakened, while negative Bank Deposit rates have remained.

In this situation, it is more profitable for investors to invest in rental housing, despite the high level of empty space. So, since 2016, the number of empty apartments in Switzerland has increased by a thirdю If in large cities there are queues to view apartments for rent, in rural areas new buildings may be half empty, but housing still continues to be built.

Ksenia Sorokina
Expert
Moscow Sotheby’s International Realty

In Switzerland, the demand for rental housing has always exceeded the supply, which is why this segment of the market has recovered as quickly as possible, and the negative impact of the crisis is almost invisible. At the same time, there is also no decline in rental rates. Rental apartments today are one of the most popular segments of the market, and this is also supported by the global trend of increasing demand for rental housing, not for purchase.

Rental apartment construction continues to grow, especially in Zurich. Same can be said about the Zug and Lucerne regions. Moreover, it is expected that in many places the share of this segment in the total housing stock will grow stronger than in the previous year. However, in Western Switzerland and especially in Ticino will have many new apartments for rent.

Examples of Swiss properties:
Flat for 1 905 000 euro in Andermatt, Switzerland
1 905 000 €
Flat in Andermatt, Switzerland
106 sq.m
Located in the Alpine village of Andermatt, this collection of 12 luxury residences and penthouses is ideal for a carefree life in the mountains. Andermatt is a picturesque mountain village in the Swiss Alps. Enter the bright, spacious residences and discover beautifully designed interiors using high-quality materials, cutting-edge household...
NF Group
Apartment for 1 757 000 euro in Andermatt, Switzerland
1 757 000 €
Apartment in Andermatt, Switzerland
95 sq.m 2 2
The complex, located in the heart of Andermatt, is a luxurious collection of fourteen residences and four penthouses. Here, the iconic Italian design is combined with the lively Piazza, set against the mesmerizing backdrop of the Swiss Alps. The windows offer incredible views of the mountain slopes. The complex has a gym and a spa complex.
NF Group
Flat for 1 753 000 euro in Andermatt, Switzerland
1 753 000 €
Flat in Andermatt, Switzerland
109 sq.m 2 2
This residential complex is a place where life proceeds at a slower pace: natural materials and warm tones create comfort, while the design and architecture reflect the Alpine lifestyle and time-honored Swiss building traditions. The complex consists of 11 luxury residences, 4 impressive penthouses and exclusive amenities for the owners; from...
NF Group
Apartment for 1 554 000 euro in Montreux, Switzerland
1 554 000 €
Apartment in Montreux, Switzerland
88 sq.m 1
5th floor➢ Apartment size: 88 sq. m➢ 1 bedroom➢ Lake and mountain view➢ The roof terrace of the complex➢ Location: the city of Montreux➢ Nearby: city center, bus stop, railway station station
NF Group
Apartment for 1 545 000 euro in Montreux, Switzerland
1 545 000 €
Apartment in Montreux, Switzerland
124 sq.m 2 2
3rd floor Apartment size: 124 sq. m➢ 2 bedrooms➢ 2 bathrooms➢ Balcony➢ Location: the city of Montreux Nearby: schools, hospital, city center, lake, harbor, railway station
NF Group
Apartment for 1 295 000 euro in Montreux, Switzerland
1 295 000 €
Apartment in Montreux, Switzerland
170 sq.m 2
Apartment size: 170 sq. m➢ 2 bedrooms➢ Balcony and terrace➢ With a private elevator➢ Location: the city of Montreux➢ Nearby: city center, shops, railway station station, highway, airport
NF Group
Apartment for 953 000 euro in Montreux, Switzerland
953 000 €
Apartment in Montreux, Switzerland
75 sq.m 2 2
Apartment size: 75 sq. m➢ 2 bedrooms➢ 2 bathrooms➢ Balcony➢ Garage➢ Location: the city of Montreux Nearby: lake, restaurants, bars, bakeries, shops, pharmacies, post office, banks, hairdresser
NF Group
Flat for 490 000 euro in Leysin, Switzerland
490 000 €
Flat in Leysin, Switzerland
118 sq.m 3 2 2
Online Viewing Remote Transaction Cryptocurrency payment Credit
Imagine a luxurious 3-room apartment in the beautiful ski resort of Leysan, located in the heart of the Swiss Alps. This apartment is ideal for those who appreciate comfort and luxury while relaxing on the ski slopes. When you enter the apartment, you will feel a sense of comfort and warmth. The apartment has a cozy living room with soft sofas...
Victoria Gaillard sarl
House for 5 800 000 euro in Montreux, Switzerland
5 800 000 €
House in Montreux, Switzerland
360 sq.m 6 4 4
Online Viewing Remote Transaction Cryptocurrency payment Credit
New luxury modern villa with panoramic views of Lake Geneva and the Swiss Alps. The house is located in a prestigious area near the St. Georges School and La Prairie Clinic. Everything for a comfortable stay and a pleasant stay! City: Chailly - Montreux Number of rooms: 5.5 Living area: 420 m2 Land area: 2'639 m2 Volume: 1'519 m3...
Victoria Gaillard sarl
Villa for 35 000 000 euro in Lugano, Switzerland
35 000 000 €
Villa in Lugano, Switzerland
1250 sq.m 15 7 6
Rental property
Luxury 15-room villa with stunning views of the lake and mountains in an elite prestigious area 3 km from the city of Lugano. Number of rooms: 15 Number of bathrooms: 6 Area: 1250 sq.m. Land area: about 4000 sq.m. Parking: 2 underground parking spaces + 6 parking spaces An exclusive villa with luxurious finishes, with a terrace and a swimming...
Estate-Service24
Chalet for 15 000 000 euro in Arosa, Switzerland
15 000 000 €
Chalet in Arosa, Switzerland
370 sq.m 8 5 6
A chalet in the Swiss Alps is comfort, prestige and a reliable investment. The area is about 370 sq.m. Bedrooms - 5 Bathrooms - 6 The chalet occupies three heated levels and offers the highest level of comfort and elegance. The location of the chalet on the south side offers spectacular views of the surrounding mountain landscape. In...
Estate-Service24
Flat in Montreux, Switzerland (price on request)
Price on request
Flat in Montreux, Switzerland
188 sq.m 4 3 3
Credit
This beautiful apartment with the panoramic view on the Geneva Lake and the Alpes has very nice location in Montreux. The construction is recent, 2008, but its has very nice style Belle Epoque. Big living room, fully equipped kitchen, 3 bedrooms, 2 bathrooms, dressing, 2 balconies and the parking place in the underground garage. The...
Victoria Gaillard sarl
Villa for 2 100 000 euro in Montreux, Switzerland
2 100 000 €
Villa in Montreux, Switzerland
200 sq.m 5 6 2
for sale a house in the center of Montreux for full reconstruction, two floors, garden, panoramic view of the lake, five minutes from the promenade and train station. A house in the heart of Montreux is for sale, which is undergoing full reconstruction. This beautiful two-story house has a garden and a breathtaking panoramic view of the lake....
Victoria Gaillard sarl
Villa in Geneva, Switzerland (price on request)
Price on request
Villa in Geneva, Switzerland
170 sq.m 6 4 3
Rental property
Luxury three-storey semi-detached house with swimming pool for sale in the picturesque chemin des vignettes 16 quarter, Crans-pres-Celigny, Switzerland. Characteristics of the property: Property type: Semi-detached house. Number of floors: Three-storey. Bedrooms: 4 spacious bedrooms. Bathrooms: 3 modern bathrooms. Description:...
Victoria Gaillard sarl
Villa for 8 300 000 euro in Lugano, Switzerland
8 300 000 €
Villa in Lugano, Switzerland
790 sq.m 9 4 6
Online Viewing
Rif.950 LUGANO LAKE Villa with about 790m2 Private garden of approximately 1000m2 Completely renovated in 2016 Fully furnished 8.5 rooms 4/5 bedrooms depending on how the rooms are used Beautiful completely renovated villa 5 minutes drive from the border with Italy and just 21km from Lugano city. Very refined and renovated with...
Il Globo Real Estate Lake Como
Flat for 1 990 000 euro in Lugano, Switzerland
1 990 000 €
Flat in Lugano, Switzerland
150 sq.m 5 2 2
Rif.705 10 minutes from Lugano city Luxurious 150 m2 apartment 2 bedrooms 2 bathrooms Terrace Private garage and parking Open lake view The apartment of 150 m2 is located on the 2nd floor of luxurious building in Switzerland, close to the city of Lugano and consists of only 6 luxury apartments, a beautiful garden that reaches the...
Il Globo Real Estate Lake Como
Villa for 6 900 000 euro in Ticino, Switzerland
6 900 000 €
Villa in Ticino, Switzerland
483 sq.m
Switzerland Canton of Ticino Lake Maggiore Stunning Liberty style villa Year of construction of the villa: 1914 The villa is after a complete restoration, during which the smallest details were taken into account. Style - "Liberty" Land area (garden): 1000 m2 Total area of the villa: 400 m2 Living area of the villa:...
INDOM
Mansion for 24 738 000 euro in Geneva, Switzerland
24 738 000 €
Mansion in Geneva, Switzerland
1100 sq.m
Switzerland City of Geneva A mansion in the historic center of Geneva A unique rare object: a chic mansion in the style of "Belle époque" in the historic center of Geneva, in a prestigious quarter that rich industrialists and bankers chose for themselves back in the XIX century. The mansion is surrounded by a beautiful 4500m2...
INDOM
Mansion for 37 000 000 euro in Geneva, Switzerland
37 000 000 €
Mansion in Geneva, Switzerland
900 sq.m
Switzerland Geneva A mansion in the Embassy quarter A unique offer in the heart of Geneva! Louis XIII style mansion in the heart of Geneva in the Embassy quarter The building of the XIX century by the famous architect John Camoletti The living area of the mansion is 900m2, consists of 4 apartments. Permission has been obtained for...
INDOM
Villa for 7 695 000 euro in Lugano, Switzerland
7 695 000 €
Villa in Lugano, Switzerland
525 sq.m 10 6 6
Rif.706 LUGANO hill side VILLA 525 m2 GARDEN 1950 m2 Indoor pool Cinema Russian sauna The villa of 1978 construction has been completely renovated with the usage of valuable and high quality materials. The house was restored according to new trends, but the original appearance of the building was preserved. The house area is 525...
Il Globo Real Estate Lake Como

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Housing for Living

Volumes are insufficient, prices are rising

The situation is completely different with the housing in which its owners plan to live. While the rental housing stock is likely to grow by 1.1% over the next 6-18 months, the expected increase in private housing is only 0.8%. Only about 11,800 condos and 5,750 single-family houses have been approved in the past 12 months, which is very low.

As a result, the market remains tense. As mortgage interest rates remain low, the general conditions for buying residential real estate are still favorable. However, the amount of housing under construction for owners remains insufficient, which leads to increased demand. If demand increases, prices rise. This trend has not yet been affected by the effects of the Covid-19 pandemic.

Since the situation in the economy has not yet stabilized, the growth of property prices for owners may slow down somewhat, but in general it will continue in 2020. The only factor that continues to limit demand and price growth is the strict financing requirements (based on the estimated cost of housing) for potential buyers.

Ksenia Sorokina
Expert
Moscow Sotheby’s International Realty

It is planned that in the middle of 2021 the situation with the construction of new housing will stabilize. 2020 shows a smaller increase in the value of real estate than predicted. The number of offers on the Swiss real estate market has always been limited, so it is difficult to say that COVID-19 was the reason for this.

The trend is not expected to reverse: the number of applications for designing single-family homes and condos is still below the long-term average, leaving a housing shortage. And, as long as negative interest rates persist, demand for apartment buildings is likely to remain high. Therefore, the focus of developers will remain on rental apartments, and not on housing for owners.

Also read: The Top-10 Most Friendly Countries for Expats

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