Swiss property still popular with wealthy European buyers
Wealthy Europeans are still flocking to Switzerland, despite difficulties accessing the country’s property market and the strength of the Swiss franc, according to Alpine Homes.
Jeremy Rollason, managing director of the property company, which is Savills’ agent for Switzerland and the Alps, said ultra-high net worth individuals see Swiss property as a safe investment, with the country proving the most popular among Europe’s wealthy.
“The property market in Switzerland is much less volatile than other markets, such as the gold market,” he said. “But buyers are usually not just buying a Swiss property to make money, it’s a lifestyle choice first and foremost.”
Recent research by Alpine Homes found that 62% of people buy a ski property for both lifestyle and investment reasons, compared to just 8% as an investment alone and 30% for lifestyle reasons.
However, the Swiss ski property market can be difficult to access because of buyer restrictions – not all properties are available to overseas buyers.
Buyers will always pay a premium for Swiss chalets and penthouses, which are well located in popular ski resorts, said Rollason. Currently, according to Alpine homes, a re-sale chalet in St Moritz can fetch over CHF 35,000 (?27,750) per spare metre, with apartments selling for CHF 20,000 per square metre.
“The key resorts, such as Verbier, Zermatt and St Moritz, are likely to see a return to sustainable growth of 5% to 8% per annum, following the freezing of house values in 2009/2010,” Rollason told CampdenFO.
Investors who are buying property in the Alpine country could be better off taking out a mortgage, even if they do not need one, he added.
“There are often tax advantages to borrowing some money when purchasing a property in Switzerland, especially as it is often possible to get money at about 1%,” he said.
“For Swiss residents owning property, it can be advantageous to have a mortgage on the property as this is taken into account for assessing the percentage of communal tax applicable to them,” added Rollason.
This tax, which varies between cantons, is based on an assumed rental value.