Switzerland to continue attracting the world’s wealthy
Switzerland remains one of Europe’s most stable and prosperous economies, an important safe haven for wealthy property investors and although new laws and taxes introduced some uncertainty to the market in 2012, luxury sales volumes have held firm, new research shows. Demand is currently being driven in part by stronger demand from Euro based buyers, according to the latest Swiss Insight report from international property firm Knight Frank.
The report points out that Swiss GDP growth is estimated to reach 1.2% in 2013 compared to -0.3% for the Eurozone so the economy is outperforming other countries in the area. Geneva and Zurich rank among the top 10 in the latest Wealth Report’s Global Cities Survey.
Demand looks set to remain strong and supply tight. According to the Knight Frank Wealth Report Switzerland is forecast to see a 27% rise in its High Net Worth Individuals between 2012 and 2022 and strict planning regulations along with Lex Weber will curtail new development.
The report also points out that 2012 provided an improving set of fundamentals for the Geneva housing market. The number of homes sold above CHF10 million rose significantly from around 15 to 35 year on year as the sense of concern amongst buyers following the Swiss National Bank’s currency cap in September 2011 started to dissipate.
Activity was markedly higher in the second half of 2012 as buyers, many interested in city centre homes as well as high end properties in the Vaud canton, looked to secure their property prior to international taxation pressure commencing.
Overall prime prices dipped by around 6% in 2012, with vendors being more realistic on price, conscious that the prices have fallen 10% to 15% from their pre-crisis highs. But the best properties in prime locations have retained their value. Areas such as Cologny, Collonge, Bellerive, Geneva’s Old Town and Champel are in the greatest demand. Aside from existing international buyers already resident in Switzerland, purchasers based in France, Spain and the UK are currently the most active in the Geneva market.
Lugano, long been favoured by northern European buyers because of its Mediterranean climate and its accessibility via nearby Milan airport, has become increasingly popular with British buyers. It is located close to the Italian border in the Canton of Ticino, and is Switzerland’s third largest financial centre.
Buyers from Russia, Italy, Germany, Northern Europe and from other parts of Switzerland are also strong in the area, attracted to the Italian lifestyle, excellent schools that have shorter waiting lists than elsewhere in Switzerland, the safe environment and Swiss efficiency.