Real Estate Buyer Trends in Switzerland, 2021

The effects of the pandemic have radically changed consumer behaviors and buying|selling trends in real estate markets. In this article, we highlight leads activity for property in Switzerland in 2021, presenting the latest trends in property searches based on our Leads database, results from Properstar survey questionnaires and validation by cross-referencing trusted sources.  

 

Buyer preferences 

 

City dwellers no longer dream of spending the weekend abroad, but rather, in their Swiss chalet. Real estate in certain mountain regions recorded an unprecedented increase in search activity and the acquisition of second homes. Agents have reported that nothing seems to deter these buyers, as some chalets that even have no water or electricity connections are purchased and in some cases with no visit to the location prior to purchase. (1)

Swiss people are rediscovering their country and searching for property within Switzerland that offers space to accommodate their new perspective on working remotely, surrounding themselves by nature outside of cities, and spaces that work for their family.

 

Pricing 

 

Strong demand for residential property together with low supply in 2021 has pushed real estate prices up. The demand is mainly generated by buyers who want to use the homes themselves – as a second or vacation property.

The increase in property values on average, in 2021 is as follows:

>   Apartments: +7.3%
>   Single-family houses +6.9%

Due to pandemic induced changes in housing needs and a solid economic recovery plan in the country, buyers see the benefit of residential property as an asset. (2)

The median price for houses is CHF 1,100,000 and the median price for apartments on the market is CHF 720,000. (3)

The most expensive properties in Suisse Romande are found in the cantons of Geneva and Vaud, followed by canton Valais, where some localities have seen a notable price increase.

 

Vacancy rates

 

  • The pandemic has instigated a quickly moving trend reversal in housing vacancies in Switzerland. Although this trend was already underway, COVID-19 has accelerated it - at a surprising rate. The Swiss Federal Statistical Office reports that vacancy rates fell in 2021 for the first time in 11 years – from 1.72% to 1.54%.

    Pandemic induced factors that affect falling vacancy rates:

    >   Less new construction: the disruption to the supply chain led to delays in the completion of housing developments.
    >   Net immigration: + 13,000 people in Switzerland last year, because the number of people moving away from Switzerland fell more than the influx of new residents.
    >   Pandemic fiscal support: increased domestic demand for housing.

    Working from home: the increasing numbers of people working from home led to a rise in the demand for space.

    Despite this trend being accelerated in 2021, it is unlikely to continue at its current pace and is likely to slow in 2022. Construction activity is likely to increase when pandemic-related constraints on production are alleviated. In addition, the growing number of people returning to the office and social activities is likely to cause the structural trend to larger apartments outside of the major centers to taper off again. (4)

 

Property searches

 

  • Lead source data for our portals shows that queries for properties in Switzerland increased throughout 2021 consistently. Lead activity in Q2 & Q3 averaged almost 10% higher than the first two quarters of the year.

    Our data shows that 53.7% of leads are looking for property to rent in Switzerland, while 45.6% are looking for property to purchase.

    For types of property, apartments score the highest lead activity, at 67.2%, then homes at 23.6% and searches for land come in at 1.9%.

    Here is a summary of the percentage of total lead activity for Switzerland, in Suisse Romande:

    Top 5 Areas of Interest

    >   42.2% Vaud
    >   17.5% Geneva
    >   16.8% Valais
    >   5.9% Fribourg
    >   3.7% Zurich

    The residential market has been particularly dynamic this year as municipalities on Geneva’s left bank are in high demand and are being favored by potential buyers. The communes of Vandoeuvres and Troinex are also very attractive due to their location, which is both very close to the city center while offering a fantastic quality of life in a protected green environment. (5)

We drilled down a bit further and discovered that buyers searching in the top regions were most interested in property in these districts: Lausanne, Riviera-pays-d'Enhaut, Nyon, Ouest Lausannois and Sierre, in descending order.

 

Real estate in the Swiss mountains

Interest in the Swiss Alps has increased, even surpassing renowned ski resorts in France. Here are the top alpine resort locations and the increase in lead activity, year over year:


>   5x Gstaad
>   4x Verbier
>   2x S. Moritz
>   1.5x Zermatt

Despite the health crisis, luxury real estate is thriving in Switzerland, with prices growing at more than twice the market average; cited at 9% growth. The increase in demand in the luxury segment drove prices up starting in 2020 and the trend continued throughout 2021, especially as demand overtook supply. 


 

Type of property searches by price range 

 

Here we can identify lead activity in 2021, as it followed the rise and fall of the pandemic. However, buyer confidence was not negatively impacted overall, as the Swiss property market is considered an asset investment.

In September and October, luxury property sales over 2.5M CH peaked at close to 5.5% of lead activity, while lower-priced property (between 400K and 1M CH) sales dominated early in Feb and April. The average leads activity for properties priced at 1-2.5M CH held a stable pattern, with an average of almost 13% for the year.

 

Market Watch 

 

The cost of buying a home in Switzerland continued to rise throughout 2021 and market experts anticipate that this trend will continue for 2022.

 

The Swiss real estate investment market remains attractive and will be driven by several factors this year:



>   Sustainability: smart infrastructure technology is becoming increasingly important in the development of real estate projects.
>   COVID-19 pandemic: may continue to act as a market influence by keeping residential real estate an attractive investment.
>   Further pressure and pricing increases in the industry related to the Energy Strategy 2050 and the associated reduction in CO₂ emissions.

Recovery from the pandemic is tentatively expected to occur in the next three years in most real estate sectors, and experts believe the best successes will be seen in leisure hotels and micro-living apartments, followed by co-work spaces and office properties. (6)

Across the Swiss market, we find that a lack of investment alternatives, high investment pressure and ongoing economic uncertainty are driving buyers to view real estate as an asset class. The Swiss real estate market is considered a safe harbor that is more crisis-resistant than other countries.

 

 

 

Sources:

(1) Radio Télévision Suisse

(2) Swiss Real Estate Offer Index

(3) RealAdvisor

(4) Credit Suisse

(5) Capvest Advisors

(6) Ernst & Young Limited

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