Given a growing return migration of Swiss and expatriate residents from across the border in France, but also economic uncertainty in Switzerland itself, there appears to be a contradiction in the way property prices are moving. Nation-wide, prices have continued to rise in 2014 – albeit at a slower rate. The Lake Geneva region, however, has witnessed a slight drop of 0.8%. At the same time, affordable houses and flats in Geneva and Vaud appear to be just as hard to find.
According to the Swiss National Bank, family-owned properties increased by 0.5% in the year leading up to June, 2014. The Zurich and Lake Geneva regions have both witnessed slight falls in prices, yet remain among the country’s most expensive.
Even though some new buildings are being offered at discount, Lake Geneva prices are largely considered solid, and, depending on location, are still rising. However, some analysts maintain that upmarket housing could be affected if more foreign companies shy away from Switzerland because of last February’s referendum on mass immigration. Credit Suisse’s 2014 Real Estate Market report notes that while no significant change is expected, “even super cycles come to an end sooner or later,” particularly if there is a sharp rise in interest rates.
“Prices really depend on where you want to buy,” noted one real-estate representative who asked not to be identified. “Morges is becoming increasingly attractive for young professionals, yet it’s hard to find anything.” Despite slight drops in rentals because of low interest rates, tenants are still hard-pressed to find houses and flats at reasonable prices. “We’re still looking at less than 1% availability in Geneva,” he added.
Some real estate analysts expect greater demand as residents in France relocate back. There is already a noticeable rise in the number of French houses and flats up for sale, which, combined with relentless building, threatens to provoke a housing glut. Residents are worried about new health-insurance regulations that recently came into effect under the Hollande government. Premiums are now based on earnings. One can no longer simply use Swiss medical facilities unless prepared to absorb the cost of a second private insurance policy.
Many, too, are concerned that Paris will soon be able to grab taxes on Swiss properties inherited by residents living in France. Although the Swiss have yet to agree, this means that anyone left a flat or chalet in Switzerland will have to pay a hefty inheritance tax of up to 45%.
The tax regime may also change as France introduces its new administrative regions. Paris could soon be taking taxes earned by frontaliers in Switzerland, but previously handed over by the Geneva and Vaud authorities to local French communes. The latter are now worried that losing these Swiss taxes could affect their ability to develop much-needed infrastructure.