UK-based relocation service MoveHub compared 2016 property price data from the Global Property Guide with average salaries according to the Hay’s Group Global Salary Forecast to determine the best countries for first-time buyers to get a foot on the property ladder.
Of the 33 countries analyzed, the United Arab Emirates topped the table thanks to a nearly eight percent drop in property prices last year.
In Switzerland, a 2.5 percent hike in salaries against a 0.68 percent drop in property prices put it in fifth place behind Spain, Greece and Singapore, ranked second to fourth.
“Overall the report revealed that countries with the biggest property price hikes had unfortunately also seen the slowest growth in annual incomes, with some salaries in decline, whilst house prices rose,” said MoveHub in a statement.
“On the other hand countries with the highest salary growth enjoyed more affordable property prices or even prices in decline, making them the best places for first-time buyers”.
Only around 30 percent of people own their homes in Switzerland, since most people rent.
Property prices can be steep, however wages are among the highest in Europe and interest rates on mortgages are currently extremely low.
Speaking to The Local, Yves Cherpillod, director of the Lausanne branch of estate agent Cardis, based in French-speaking Switzerland, said he’s never seen such good conditions for buyers as now.
Following a sharp rise in the market from 2000 to 2012, house prices have since gone down again, he said.
“Now we are in a period where customers who are looking for a home can really discuss the sale price and when they have negotiated a good deal that the vendor accepts, they can then obtain exceptional financing.”
At the moment mortgages can be as low as 1.5 % for a ten year deal, he said.
“In 34 years in the business I’ve never seen this.”
According to the UK-based Global Property Guide the median asking price for a family home in Zurich in 2016 was 1.62 million francs, while apartments in the same city were going for 11,250 francs per square metre.
In Geneva those figures were 1.44 million francs and 11,710 francs per square metre, respectively.
Swiss lenders can be conservative, requiring borrowers to put down a sizeable deposit, while non-EU foreigners wishing to buy are subject to certain restrictions. There are also law limiting second homes and holiday properties.
However if you can do it, buying in Switzerland is a great investment, feels Cherpillod, particularly for those who choose to rent it out when they return to their home country.
“Often foreigners, more than Swiss, can afford to put more than 20 percent down as deposit to buy a home. With such low loan rates and rents that largely cover the costs, they can really benefit,” he said.
Turkey was named the worst of the 33 countries for first-time buyers in MoveHub’s research. While wages have only grown by 0.6 percent over the past year, house prices have shot up by 16.42 percent, mainly due to foreign investment, found the report.