How Much is Your Property Worth?

Residential real estate is in demand in Switzerland. Mortgage rates are at historic lows (about 1.5% for a 3M Libor Mortgage), and are likely to stay that way for a while. The population is increasing, largely thanks to a strong economy and a net influx of people.

New homes are being built at a record rate, but demand is outstripping supply. The result is: rising property prices and an active property market.

But, house prices are dependant on region and type of property, and it is difficult to generalise about property prices across the whole country. For example, while a detached house around Lake Geneva is expected to rise by about 4% in 2009, a similar house around Lake Zurich is expected to rise by more than 6%.

To work out what your property is worth, we have produced a price calculator, based on statistics from the Swiss National Bank and Wüest & Partners: Have a look at price trends in your area and work out how much your real estate investment is worth.

The most sought after properties are detached houses, and historically in Switzerland, these cost about 8 times average annual household income. This makes owning a home in Switzerland expensive by international comparison. (In the UK, a home still only costs 5.5 times average income)

What makes homes still affordable, though are the relatively low mortgage rates available, which are well below the long term average of 5%, and can be found for as low as 1.5%. On the down side, what prevents many people from becoming property owners is the legal requirement of a 20% deposit as an initial downpayment on all property purchases. It is rare to find a mortgage for more than 80% of the property price. A farirly modest house in the Geneva region costing 2 million francs will therefore require a whopping 400'000 CHF downpayment. If you don't already have a house to sell, then you need to be a very good saver!

Another important factor is that Switzerland is changing rules governing the sale of real-estate to foreigners, making it much easier for EU nationals and others to purchase property in Switzerland. Well heeled immigrants tend to want to purchase their own property, and there is the added factor of second home ownership.