Switzerland » Market Report

Switzerlands real estate market boomed in the 1980s and prices rose sharply. Single-family house prices doubled. House prices peaked in 1989 and remained high until 1991 when prices began to fall. They fell continuously until 1999 and it was until 2000 that house prices began to rise again for the first time in more than a decade. The price for office space followed a similar pattern, but rose even more sharply than residential property and did not peak until 1991, two years after the peak in house prices. 

The rise and succeeding fall of real estate prices was part of a broader macroeconomic boom and bust period in Switzerland. The whole economy showed high rates of growth during the 1980s, followed by an curiously long recession in the 1990s that lead to higher unemployment, consumer price inflation falling to zero and the Swiss National Bank (SNB) eventually cutting interest rates to one-quarter of a percent.

In Switzerland, construction of around 47,000 residential units was to be completed till (2005), more than at any time in the last ten years. Owing to the concentration of wealth in and around the Swiss Canton of rich, the housing market there is an active one for renters and buyers, lessors and sellers alike. Until the 1990s, almost no reliable statistical data was available for any given property, and value estimations were either done by traditional real estate appraisers or by gut feelings about what the market value might be at a particular time.

The residential property market will relieve in most conurbations this year. Only in the Geneva region there are few signs of movement. Credit Suisse economists have reached this conclusion in this year's edition of their study "The Swiss real estate market facts and trends". The authors believe that there will be slower price growth in all sectors of the residential property market than in 2004.

Rising interest rates will, instead, guide to an increase in existing rents, but on average rental growth for newly constructed properties was unlikely to be observed in 2005. In fact, some decline in rents at the top end of the market may be seen this year. Price growth for condominiums and single-family dwellings will continue to weaken in the current year.

It also provides excellent transport and communications, efficient public services and, for many people, low rates of taxation.

For permanent living, Switzerland is politically, socially and economically steady, wealthy, open to foreigners, very clean, safe and renowned for its friendliness and hospitality. It offers schools and universities of international repute.

International Property brokers forecast that the annual growth in the real GDP of the Switzerland will remain 1.9% in the fiscal year 2008 to 2012. Growth in the domestic products of the Switzerland will remain robust in the year 2008 to 2009. International Property Brokers also forecast that the Swiss real estate prices will continue to rise in 2008 and 2009. Strong economic growth and population movements have a positive effect on demand for space and more and more foreign investors are emerging on the market. We therefore expect 2009 to be a good year, similar to 2007 and 2008, with some submarkets seeing even better performance.