Swiss real estate: the lure of prime property

27 June 2022

Interview conducted by Stuart Butler, Head of Credit Structuring, Barclays Private Bank

Luca Tagliaboschi is the CEO of real estate agency Cardis Sotheby's International Realty, which focuses on brokerage and promotion in the sale of apartments, houses, chalets, and land. He talks to us about the factors driving demand for properties in prime Swiss cities, the regions experiencing the most growth, the effects of home working, and the role of supply and demand.

Please note: The views expressed in this article are not the views of Barclays Private Bank. Professional advice should always be sought when selling or buying property. 

Luca, in your opinion, what is driving the current demand for property in prime Swiss cities?

The Swiss economy is very stable: mortgage rates are low and interest rates are negative. However, the COVID-19 pandemic also played a role as it brought us back to basics: spending more time at home, wanting bigger outdoor spaces, and rooms dedicated to home-working.

We should also remember how the Swiss authorities managed the pandemic. Far less drastic measures were implemented than in many other countries, and a resilient hospital and healthcare system was able to cope with the crisis. These are all reassuring considerations that make our country a good place to stay in, or to move to. Finally, Switzerland’s tax base is more favourable than those of other countries, which is a factor that benefits the high-end property market.

The COVID-19 pandemic triggered an increase in demand for Swiss luxury real estate. Do you believe Geneva and other prime Swiss cities will remain high on the list of relocation options. If so, why?

The cities of Geneva and Zurich have always flourished in the high-end property market. It must also be said that the pandemic has clearly reinforced this trend, as we previously mentioned. If you take the luxury property market in Geneva during 2021, 196 properties exceeding CHF 4 million (in value) were sold for CHF 1.74 billion, which represents an increase of 36% on the number of transactions per year1.

There is no doubt that Geneva and Zurich will remain top cities for purchasing prestigious properties. The Lake Léman region and its properties on the water’s edge, in particular, have also been in high demand during this period. Not forgetting mountain resorts such as Gstaad, which have been developing since last year and Verbier, Crans-Montana, or Zermatt where prices soared in 2021 as a result of foreign clients deciding to buy in Switzerland.

Do we see greater demand for luxury properties in Switzerland than in other prime cities such as Paris or London?

Demand for luxury property in Switzerland is holding its own alongside other cities such as Paris or London. Customers remain strongly attracted to Switzerland due to our tax policies, political stability, and excellent schools. We also have a robust medical system, proximity to airports, postcard landscapes with views of the lake and mountains, as well as spacious properties.

Furthermore, we are still seeing very strong demand from international customers for luxury properties. For example, we recently put a waterfront property of nearly one hectare on the Riviera of Lake Léman on sale, with views of the lake and the mountains, which greatly appealed to a foreign clientele.

Following a long period of working from home, sometimes in rural areas, do you see a return to urban living?

Yes, we see more and more people eager to return to cities. It should be noted that in Switzerland, we did not really experience a strict lockdown like other neighbouring countries such as France or Italy. On the other hand, we are also seeing a high demand for properties with patios, balconies, and outdoor facilities. It is also not uncommon for people to ask for an extra room for home-working.

Interest rates for mortgage lending have been historically low – do you see that changing in the near future?

Yes, mortgage rates are very low, and this encourages people to buy properties in our country. We believe that the situation will continue, and that 2022 will also be a good year, because the luxury market will always flourish.

Are domestic buyers replacing international buyers in centres such as Geneva, Paris, and London?

In Switzerland, where we are more familiar with trends, we know that buyers of prestigious properties come from all over the world. Many are, however, Swiss or foreign customers who have been living in Switzerland for many years.

Is the supply of new building developments meeting demand in the wider Suisse Romande area?

Demand for new projects is generally very strong in French-speaking Switzerland across all price ranges, and the supply of new properties is currently not sufficient to meet the demand of all these potential buyers.

New projects remain very popular, because they provide buyers with a choice of finishing materials and the ability to personalise their living spaces. Many buyers are also seeking new projects that take the environment and renewable energy sources into account.

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