Switzerland has always been a place of stability and prosperity. Its excellent economic development over the last hundred years, political stability and the world\\\’s largest currency reserves (3rd largest in the world) have made Switzerland the most attractive place for private investment.
In addition to its charm and beauty as a holiday destination, Switzerland attracts the international community because of its overall economic and political stability, its well-protected natural landscapes, its world-class education system and its low crime rate.
Access to the Swiss property market for foreigners
But how difficult is it to buy a house or holiday home in Switzerland if you are not Swiss? Very difficult. In fact, it\\\’s almost impossible without a permit. Unlike other Alpine countries such as France, Italy, Austria or Germany, Switzerland is not part of the EU and has therefore passed laws restricting the purchase of foreign property.
Switzerland\\\’s Lex Koller is a long-standing law that essentially prohibits foreigners from buying property without authorisation. The Lex Koller distinguishes between categories of property, such as commercial and residential, and types of buyer. A person who wants to move to Switzerland is treated differently from a person who wants to buy a holiday home. Buying a holiday home in the Alps is a little easier. But foreign buyers are still limited to 1,500 permits per year, spread over 26 different cantons. Other restrictions vary from region to region. Some regions prohibit the resale of property owned by a foreigner for less than five years. In other regions, foreign buyers can only buy from other foreign buyers.
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In 2012, a referendum was held in Switzerland on the Lex Weber law. This law prohibits the construction of holiday homes if 20% or more of the dwellings in the area are already holiday homes. In essence, this means that new holiday homes cannot be built in popular ski resorts because these areas already have a large number of so-called \\\’second homes\\\’ (tourist accommodation and holiday homes). As this law has led to a reduction in the number of second homes being built, additional restrictions have been placed on foreign purchases to ensure that Swiss buyers are not priced out of the market.
In addition, investing in property in Switzerland is also a capital protection tool, and only secondarily an income tool. Growth in the value of residential property in Switzerland does not exceed 5-7%. Of course, given the availability of credit, including for foreigners, combined with very low mortgage rates, real estate in Switzerland has now become a profitable tool. The interest rate on a 10-year mortgage is around 3% ( february 2023) per annum in Swiss francs. Foreigners can obtain a loan for 40% of the total purchase price. However, it should be noted that Switzerland has strict rules for foreigners buying property. For example, you can buy a house in the mountains of Switzerland for recreation and skiing, but a studio apartment in Zurich or a cheap property in Geneva costing from 600,000 Swiss francs will not be available to you unless you have a residence permit in Switzerland.
The concept of cheap property in Switzerland does not exist, with prices starting at an average of 9000 Swiss francs per square metre. It must be said that in recent years there has been a \\\”tradition\\\” of misleading buyers about the actual size of the property. Construction companies and estate agents often overestimate the total area of the property, including the area of the balcony or loggia. Sometimes it turns out that a 115 square metre apartment is much larger than a 120 square metre apartment (as advertised) because it has a 20 square metre balcony.
Another important consideration is the age of the property. You should choose a property that is not more than 10 years old.
Prices for detached houses in Switzerland
The average price of a house currently on the market is CHF 1 200,000. The asking price for 80% of the properties for sale is between CHF 6000,000 and CHF 2,900,000. The average price per square metre in Switzerland is CHF 6,500 / m² (price per square metre).
Apartment prices in Switzerland
The average price of an apartment on the market is currently CHF 760,000. The asking price for 80% of properties is between CHF 500,000 and CHF 1,850,000. The average price per m² in Switzerland is CHF 7,200/m² (price per square metre).
The above prices are average across the country, but are significantly higher in the larger cities.