Property in Switzerland: How much space will 1 million francs buy you?
In some countries, you can buy a mansion for 1 million francs, but that's not the case in Switzerland.
There is an obvious paradox in Switzerland: in a country that has one of the highest per-capita GDPs in the world and is among the nations with the highest disposable income per resident, very few people live in their own homes.
The main reason is the very high price of properties (read more about this below), which prevents many middle-class families from ever owning a house or an apartment.
Surprisingly (and even shockingly), 1 million francs will not buy you much of a dwelling, especially in notoriously high-cost cities like Geneva and Zurich.
A new survey by Wüest Partner real estate consultants, which analysed property prices in 106 Swiss regions, found that in Geneva, 1 million francs will buy you only 50 square metres of living space.
The reason is the city’s location: it is nestled in the southwest corner of the country, where it is wedged between France and Lake Geneva. The land for new constructions is therefore very limited, impacting not only home ownership, but also availability of rental housing as well.
Next is Lausanne, where, for the same price, you will have a slightly larger space — 64 square metres.
Real estate in the Vaud capital is highly priced, because the large number of multinational companies headquartered in the area employ high-income individuals, both Swiss and foreign nationals.
Property prices in Lausanne are among the highest in Switzerland. Photo by Nolan Krattinger on Unsplash
READ ALSO: Why the Swiss city of Lausanne is so popular among foreigners
In terms of cantons rather than cities, Zurich is the most expensive, with 51 square metres of living space for 1 million francs, just ahead of Zug and Geneva (59 square metres).
Where in Switzerland can you get most bang for your 1 million?
The least expensive real estate, according to the survey, can be found in the city of Biel/Bienne, where 1 million will get you 128 square metres.
Canton-wise, it is Jura, where you are able to buy a spacious 192-square-metre dwelling for that price.
What's behind such high prices, as well as the price disparity between regions?
Switzerland is a very small country, where building land is scarce, and therefore correspondingly expensive.
Also, the demand outstrips the supply, which raises prices as well.
Fewer apartments and houses are being built throughout the country, for several reasons.
The higher cost of materials is one, but there are others as well: many cantons and municipalities have stricter laws now regarding heights of buildings, as well as tougher noise ordinances to comply with.
Another factor is that Switzerland’s population — and therefore demand for housing — has been growing with the unprecedented influx of immigrants.
In fact, the current 8.8 million residents, are expected to swell to 10 million in the coming years, according to forecasts.
The result of this demographic growth is “that real estate properties tend to continue climbing as long as Switzerland remains a particularly attractive destination for immigrants," according to a report by Moneyland consumer platform.
READ ALSO : How immigration is impacting Switzerland
In terms of price differences between cities and cantons, that is explained by the fact that regions with large urban centres and employment opportunities — like Geneva, Zurich, Zug, and Lausanne — are far more in demand than mostly rural areas.
Will property prices become more affordable in the near future?
Based on what is known today, unfortunately not.
Because properties are still in high demand, prices have grown by 3.4 percent on average since the same period in 2022, the survey indicates.
In addition, to afford housing, you would now have to pay much more than before.
That’s because since 2022, mortgage rates have increased by 1.5 percent.
This means that if you buy an apartment for 1 million francs and take out a mortgage for 80 percent of the purchase price, you have to pay 20,000 francs in mortgage interest per year.
At the beginning of 2022, this amount was still 8,000 francs, Wüest Partner noted.
Comments
See Also
There is an obvious paradox in Switzerland: in a country that has one of the highest per-capita GDPs in the world and is among the nations with the highest disposable income per resident, very few people live in their own homes.
The main reason is the very high price of properties (read more about this below), which prevents many middle-class families from ever owning a house or an apartment.
Surprisingly (and even shockingly), 1 million francs will not buy you much of a dwelling, especially in notoriously high-cost cities like Geneva and Zurich.
A new survey by Wüest Partner real estate consultants, which analysed property prices in 106 Swiss regions, found that in Geneva, 1 million francs will buy you only 50 square metres of living space.
The reason is the city’s location: it is nestled in the southwest corner of the country, where it is wedged between France and Lake Geneva. The land for new constructions is therefore very limited, impacting not only home ownership, but also availability of rental housing as well.
Next is Lausanne, where, for the same price, you will have a slightly larger space — 64 square metres.
Real estate in the Vaud capital is highly priced, because the large number of multinational companies headquartered in the area employ high-income individuals, both Swiss and foreign nationals.
READ ALSO: Why the Swiss city of Lausanne is so popular among foreigners
In terms of cantons rather than cities, Zurich is the most expensive, with 51 square metres of living space for 1 million francs, just ahead of Zug and Geneva (59 square metres).
Where in Switzerland can you get most bang for your 1 million?
The least expensive real estate, according to the survey, can be found in the city of Biel/Bienne, where 1 million will get you 128 square metres.
Canton-wise, it is Jura, where you are able to buy a spacious 192-square-metre dwelling for that price.
What's behind such high prices, as well as the price disparity between regions?
Switzerland is a very small country, where building land is scarce, and therefore correspondingly expensive.
Also, the demand outstrips the supply, which raises prices as well.
Fewer apartments and houses are being built throughout the country, for several reasons.
The higher cost of materials is one, but there are others as well: many cantons and municipalities have stricter laws now regarding heights of buildings, as well as tougher noise ordinances to comply with.
Another factor is that Switzerland’s population — and therefore demand for housing — has been growing with the unprecedented influx of immigrants.
In fact, the current 8.8 million residents, are expected to swell to 10 million in the coming years, according to forecasts.
The result of this demographic growth is “that real estate properties tend to continue climbing as long as Switzerland remains a particularly attractive destination for immigrants," according to a report by Moneyland consumer platform.
READ ALSO : How immigration is impacting Switzerland
In terms of price differences between cities and cantons, that is explained by the fact that regions with large urban centres and employment opportunities — like Geneva, Zurich, Zug, and Lausanne — are far more in demand than mostly rural areas.
Will property prices become more affordable in the near future?
Based on what is known today, unfortunately not.
Because properties are still in high demand, prices have grown by 3.4 percent on average since the same period in 2022, the survey indicates.
In addition, to afford housing, you would now have to pay much more than before.
That’s because since 2022, mortgage rates have increased by 1.5 percent.
This means that if you buy an apartment for 1 million francs and take out a mortgage for 80 percent of the purchase price, you have to pay 20,000 francs in mortgage interest per year.
At the beginning of 2022, this amount was still 8,000 francs, Wüest Partner noted.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.