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PROPERTY

Swiss property prices see strongest rise in years

Residential property prices in Switzerland experienced one of the strongest price increases in recent years, new figures show.

Swiss property prices see strongest rise in years
The prices of Switzerland’s housing, here in the old part of Lucerne, has risen significantly this year. Photo by Dorothea OLDANI on Unsplash

During the first nine months of this year, house prices rose by 6.2 percent, while apartments went up by 5.2 percent, according to RealAdvisor appraisal platform

Where are the properties most expensive?

As this RealAdvisor chart indicates, the priciest housing is in urban centres like Geneva, Zurich, and Basel, or locations with a high concentration of multinational companies and residents, such as Zug and Lausanne.

RealAdvisor’s chart shows not only by how much property prices have increased between January and September 2021 — 1 percent is a Swiss average — but also the price buyers paid for a square metre of a single-family house or apartment.

Image by RealAdvisor

“This steady rise in prices, although at a more moderate pace this quarter, attests to continued strong demand. But it also signals that there are fewer available properties”, said Jonas Wiesel, RealAdvisor’s co-founder.

The number of apartments for sale dropped most in Biel (-31 percent), Zug (-26 percent) and Lausanne (-23 percent). On the single-home market, the decrease is even more drastic, mainly in Zug (-58 percent), Neuchâtel (-45 percent), Schaffhausen (-38 percent), and Geneva (-28 percent) .

Why do Swiss property prices keep rising?

As The Local explained in a recent article, 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.

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

The good news, however, is that the situation on the property market is now stabilising in regards to price hikes.

These links provide useful information for all those who are looking for houses or apartments to buy in Switzerland:

READ ALSO: Property in Switzerland: Where are house prices rising the fastest?

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PROPERTY

Can foreigners apply for (and get) a mortgage in Switzerland?

If you are a foreign national and want to buy property in Switzerland, you may be wondering whether you are eligible for mortgage. The answer depends on several factors.

Can foreigners apply for (and get) a mortgage in Switzerland?

The most important condition for being able to obtain a Swiss mortgage is your residency status. So the question should be not whether you qualify for a mortgage but, rather, if you can purchase property in Switzerland in the first place.

Logically, if you are allowed to buy a house or an apartment in Switzerland, then you can apply for a mortgage as well.

Who can and can’t buy a house / get a mortgage?

A citizen of an EU / EFTA state can freely purchase real estate (home or land) in Switzerland. This applies to both primary residence and holiday homes.

The same is true for third-country citizens, say US or UK nationals, who have a valid permanent residency B or C status — there are no restrictions placed on them either.

However, rules are in place for people from outside Europe who don’t have either of the two above-mentioned residency permits.
They will need a permission to purchase housing in Switzerland — a measure intended to prevent Swiss properties from falling into foreign hands.  

Additionally, they can only buy a house which will be used as the primary residence — this means that they can’t buy it as an investment and rent it out.

And if you are a cross-border worker in Switzerland (G permit), you can buy a second home in the vicinity of your  place of employment without authorisation. However, you are not allowed to rent out this property for as as long as you work in the region as a cross-border commuter.  

Conditions are even stricter if you a foreigner living abroad — rules for such purchases are set out in a law called Lex Koller and are quite complex.

Unless you are looking to buy holiday homes in Appenzell Ausserrhoden, Bern, Freiburg, Glarus, Grisons, Jura, Lucerne, Neuchâtel, Nidwalden, Obwalden, St. Gallen, Schaffhausen, Schwyz, Ticino, Uri, Vaud and Valais, you will need a special permission as well.

READ MORE: ‘Lex Koller’: What are Switzerland’s rules for foreigners buying property?
 

Where can you ask for authorisation to buy a house?

If you are among those who need a special permission to own a house, you should apply for permission to cantonal authorities in the municipality where the property located.

Page 13 of this PDF document indicates contact addresses for each canton.  Officials will indicate what paperwork you need to submit for consideration of your case.

What about mortgages?

Needless to say, if your application is rejected, you will not be given a mortgage either.

If it is approved, then you can apply in pretty much the same way as Swiss citizens do, though you will be asked to provide additional documents, such as your work / residency permit, for example, along with the canton’s authorisation.

From then on, it is up to you and your financial abilities to choose the mortgage that suits you best from among several types available in Switzerland, such as SARON and LIBOR mortages, which are detailed here:

EXPLAINED: What is Switzerland’s ‘SARON’ mortgage?
 

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