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PROPERTY

How much do you need to earn to afford a house in Switzerland?

Properties are expensive in Switzerland and out of reach for most families. Here’s how much you should earn to turn a dream of home ownership into reality.

Swiss properties are among the most expensive in Europe.
Only high-earners can afford to buy a single-family home in Switzerland. Photo by Olya Kobruseva from Pexels

Real estate prices have been soaring in Switzerland in recent years, continuing to climb even during the coronavirus pandemic when much of the country’s economy came to a standstill.

While many experts feared that real estate market in Switzerland would collapse during the health crisis, the opposite has happened: price of properties went up by 5.5 to 5.6 percent.

Prices vary from one region to another, but the average for Switzerland is about 1.25 million francs for a single family home — price that is out of reach for middle-class people.

The most expensive regions for real estate are in or near urban centres of Zurich, Geneva and Basel. But  some relative “bargains” can be found in Switzerland as well, especially in rural areas of some cantons.

For instance,  a single-family home in Jura costs about 587,000 francs — the cheapest price in Switzerland, according to one study.

Glarus is slightly higher at 771,000, francs, followed by Valais at 783,000 francs. 

READ MORE: In which Swiss cantons are homes the cheapest – and the most expensive?

It is perhaps not surprising, given how expensive properties are here, that Switzerland has the lowest proportion of home owners in Europe — just over 41 percent.

One major reason for such a low rate of home ownership — and high real estate prices —  is scarcity of land.

Switzerland is a small country with little land left to be developed and the development of whatever land is available is strictly regulated; for instance, agricultural land can’t easily be used for construction.

And as Switzerland’s land is not expandable, “residential real estate will continue to appreciate in value”, Stefan Fahrländer, chairman of the board of Fahrländer Partner, a real estate consultancy firm in Zurich, said in an interview.

The only thing to stop prices from rising would be “a massive regulatory intervention or sharp rise in interest rates ”, he said.

Another reason for the shortage of  homes is “because there are more and more people in the country”, according to Roman Ballmer from Zurich property firm Lazi.

“Even in 2020, the year of the pandemic, immigration increased and fewer people left the country”, he said.  “For the few homes for sale, there are more and more auctions, with properties selling well above the original asking price”.

So how much should you earn to be able to buy a house?

This would depend on the kind and size of property, as well as its location.

Generally speaking, the minimum annual income allowing to purchase real estate in Switzerland should be 200,000 francs, Fahrländer said.

However, the property would be on the outskirts of cities and “not necessarily new and upscale”.

While the 200,000-franc annual salary (or salary with income from investments) is not rare in a Swiss household where both spouses work full-time, it is above the average wages — about 63,000 francs — of  middle-class families . This salary level is higher than almost anywhere in Europe, but still not enough to afford a home.

Those earning less than 200,000 francs a year usually “can get their own housing only by inheritance”, Fahrländer noted.

This particularly impacts young families.

“Young people can save as much as they want but if they don’t inherit, their dream of owning a house will not come true”, according to Ballmer

READ MORE: Why do so many Swiss prefer to rent rather than buy their own home?

Member comments

  1. I would also argue that Swiss housing is also extremely inflated. Ultra low interest rates and extra loose lending conditions are a major factor behind why Swiss housing is expensive. It’s worth noting that Switzerland isn’t isolated. If you go to more dynamic and populated markets you will see similar price levels i.e. London and Paris.

    The lack of housing stock isn’t being caused by immigration or a lack of land. This is completely wrong. The lack of housing stock stems from housing wealth being monopolised by wealthy individuals within Switzerland who have access to cheap credit.

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LIVING IN SWITZERLAND

Reader question: How can I find a good lawyer in Switzerland?

Although you hope to never need one, sometimes you might have to seek legal advice in Switzerland. This is how to find it.

Reader question: How can I find a good lawyer in Switzerland?

When you move to a new country, including Switzerland, you have to look for a whole new network of professionals.

You may or may not have immediate need for the proverbial butcher, baker, and the candlestick maker, but sooner or later you will have to find other professionals, with the most essential one being a doctor.

READ MORE: What you should know about finding a doctor in Switzerland

Chances are you will also need, at one time or another, a legal counsel. That should in principle not be a problem as Switzerland has an abundance of lawyers — 7,317 currently practicing in the country, according to European data.

The question of how to find one that best suits your needs depends on many factors — for instance, what kind of legal advice you are seeking (estate planning, inheritance, divorce, etc), whether you speak the language of your region or need an English-speaking attorney,  and whether you can pay (the often exorbitant) fees, or need free counselling instead.

Speaking of fees, the hourly rates vary widely from one lawyer or legal practice to another, with some charging as little as 100 francs or as much as 1,000.

Much depends on the lawyer’s location — with the ones practicing in large cities like Zurich and Geneva being more expensive than their counterparts in small towns or rural regions  — the area of specialisation and general reputation — the more prominent the attorney is with a roster of famous or well-heeled clients, the higher fees they will typically charge.

An important thing to know is that, depending on the advice you are seeking, you may not need a lawyer at all, but rather a public notary; in Switzerland, these professionals perform many tasks that only attorneys can do in other countries, such as drawing contracts and establishing other legal documents.

Here are some tips on how to find a lawyer or a notary that best fits your needs:

Word of mouth

As with any other services, personal recommendations from people you know and trust are best.

This will spare you the effort of “investigating” the person, such as researching their credentials and feedback from previous clients — the due diligence process that everyone should undertake before hiring any professional.

Professional associations

If you don’t know anyone who can recommend an attorney, do your own research.

Professional organisations such as the Swiss Bar Association (SBA) and the Swiss Federation of Notaries are good resources, as they both allow you to look for professionals in or near your place of residence.

English-speaking attorneys

Many Swiss lawyers and notaries, especially those practicing in large urban centres where many foreign residents live, speak English.

But if you want to make sure yours does, the UK government put together a list of English speaking attorneys in Switzerland, which should help you with your search.

‘Free’ legal advice

In principle, all legal assistance comes at a cost, except for exceptional cases, which are defined by each canton.

SBA has a canton-by-canton list, where the designation “GRATIS JUDICATURE” stands for “free legal advice”.

However, there is also such a thing in Switzerland as “legal protection insurance” (Rechtsschutzversicherungen in German, protection juridique in French, and protezione giuridica in Italian).

It covers attorney and other associated fees if you undertake court action against someone, are sued, or simply need legal advice.

There are two different types of legal protection insurance — one specifically for traffic accidents and the other for all other matters. Sometimes they are combined.

Typically, this insurance covers costs of legal representation associated with contract disputes, employment, loans and debts, healthcare, housing, retail purchases, and travel.

The annual cost of this insurance, which you can purchase from practically every carrier in Switzerland, is minimal, especially if you consider how much you’d have to spend if you hired an attorney yourself.

Another benefit of these policies is that a lawyer will be assigned to you by the insurance company so you won’t have the headache of looking for one on your own.

This article provides more information about this insurance:

EXPLAINED: Why you need ‘legal protection insurance’ in Switzerland

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