FOR MEMBERS

Property in Switzerland roundup: Could foreigners be excluded from buying Swiss properties?

The dream of a Swiss home may become less reaéistic for foreigners.
Will foreigners be allowed to buy homes in Switzerland? MPs are debating the issue. Photo by Olya Kobruseva from Pexels
Stay up-to-date on the latest Swiss property news with The Local's weekly roundup.

National bank warns of real estate shock

The Swiss National Bank (SNB) has issued an urgent warning of the dangers in Switzerland’s property markets.

“Mortgage lending and residential property prices have risen strongly, further increasing the vulnerability of the mortgage and real estate markets.”, SNB said.

The greatest risks lie in the residential property segment, according to SNB’s president Fritz Zurbrügg.

This finding is confirmed by a recent UBS Real Estate Bubble Index.

It shows that the most at-risk regions are parts of Vaud, Lugano, Basel, the Zurich area, as well as Zug and Lucerne.

Could foreigners be excluded from buying Swiss properties?

The law called Lex Koller, which makes it difficult for people from abroad to buy real estate in Switzerland, was first introduced in 1961 and revised (relaxed) in 1997.

However, it is now experiencing a revival of sorts, with the National Council debating tightening the legislation.

The aim is to prevent foreigners from driving up property prices in Switzerland.

The Swiss People’s Party (SVP) is spearheading the move to make Lex Koller more restrictive.

One of its MPs, Thomas Aeschi, sees immigration as the cause of rising property prices, claiming that the legislation must be tightened “because the mass immigration initiative has not been implemented”.

He was referring to Switzerland not fully implementing the anti-immigration referendum of 2014.

The number of empty rental apartments in Switzerland is falling, demand for home ownership rises

Fewer rental apartments are vacant now than a year ago due to sluggish construction activity in the third quarter of 2021, according to the Credit Suisse Real Estate Monitor study.

In addition, the Covid pandemic has been delaying the delivery of building materials.

As a result, vacancies fell by 16 percent, or 1,900 apartments.

At the same time, the demand in residential property market remains tight, partly due to the pandemic and the increased work in the home office.

Overall, property prices rose 6.6 percent in the 2nd quarter of 2021, compared to the same period of the previous year. The vacancy rate for owner-occupied homes is just under 0.5 percent.

Did you know?

Like every other country, Switzerland has its own rules pertaining to apartment rentals.

A guide published by the government outlines all you need to know to rent a flat, including such essential information as how to apply, what accessory charges you might have to pay in addition to rent, your rights and obligations as a tenant, and even how to get on with your neighbours.

Basically, every question you may have about living in a Swiss apartment is right there.

Useful links

Looking for a house or an apartment in Switzerland or just want a little more information about the property market, then check out the following links. 

EXPLAINED: The hidden costs of owning a home in Switzerland

EXPLAINED: The hidden costs of buying a home in Switzerland

Swiss daily dilemmas: Can I flush my toilet at night?

The property roundup is a weekly feature and we’d welcome any feedback or suggestions for areas it should cover. Please email us at [email protected]


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