Real Estate Investment Performance: Switzerland Property Index 2021 (2024)

FAQs

Real Estate Investment Performance: Switzerland Property Index 2021? ›

MSCI and Wüest Partner have published the “Switzerland Annual Property Index” for direct real estate investments. It shows that the total return across all property categories was 6.8 percent in 2021, the return on net cash flow was 3.3 percent and the change in value return 3.4 percent.

Switzerland, renowned for its breathtaking landscapes, high quality of life, and economic stability, is an ideal destination for those seeking to invest in real estate or plan for a peaceful retirement.

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The average house in Switzerland costs 1.19 million Swiss francs, which is currently 1.34 million US dollars and 1.08 million British pounds. However, there are significant regional variations. You can find the cheapest houses and apartments in the canton of Jura. Real estate is the most expensive in the canton of Zug.

The housing market in Switzerland

Switzerland is the third-most expensive country in Europe to buy property per square meter, behind only Monaco and the United Kingdom. Current average prices are: CHF 665,000 to buy an apartment (CHF 6,356 per square meter) CHF 1,030,000 to buy a house (CHF 5,941 per square meter)

In real terms, the return from Swiss equities averaged 5.6% between 1926 and 2023, only slightly down from the 6.0% figure for the period between 1926 and 1998. The variation is smaller for Swiss bonds, which made an average annualised 10-year real return of 2.0% up to the end of 2023 compared with 2.1% at end-1998.

Commercial real estate, like retail complexes, office spaces, and industrial properties, remains reliable for generating substantial income. This sector often provides long-term leases with stable cash flows, making it an attractive option for those investors seeking a consistent return on investment.

How much money do you need to live comfortably in Switzerland? ›

If you are a family, you can expect to spend between 4000 and 8000 Swiss francs per month on living expenses. If you are a single person, you can expect to pay between 2500 and 4000 Swiss francs per month on living expenses. These costs can vary depending on your lifestyle and where you live in Switzerland.

Income and borrowing capacity

At most banks in Switzerland, acquisition-related expenses (mortgage amortisation, maintenance costs, etc.) may not exceed 33% of your gross annual income. For example, for a property with a purchase price of CHF 1,000,000, your income must be at least CHF 180,000.

Non-Swiss residents acquiring a home in Switzerland must apply for a foreign buyer's permit. This entitles the owner to reside in the country up to 180 days per annum, subject to a maximum stay of 3 months at a time. Non-Swiss residents, are not permitted to own more than one residential property.

While there are numerous benefits to living in Switzerland, there are also some drawbacks to consider: High Cost of Living: As mentioned earlier, the cost of living in Switzerland is considerably high. This extends beyond just housing and includes groceries, dining, and general entertainment.

According to the index, there is currently no risk of a real estate bubble in Switzerland.

In Europe, homeownership is a deeply rooted part of society. Most young people are taught that owning a home is important and a good investment. In contrast, in Switzerland, the culture of renting is very strong. Naturally, this is a main reason for low rate of homeownership.

If you're not sure whether you want to stay in Switzerland for the long term, it might be better to rent. However, if you're planning on staying for a while, buying a house is the better option – especially since buying a property here is notoriously slow. There are pros and cons to renting or owning a home.

Non-Swiss residents acquiring a home in Switzerland must apply for a foreign buyer's permit. This entitles the owner to reside in the country up to 180 days per annum, subject to a maximum stay of 3 months at a time. Non-Swiss residents, are not permitted to own more than one residential property.

Property tax

Whether you buy, own, or sell your property in Switzerland, you will need to pay taxes for it. If you are purchasing property, you will need to pay a property transfer tax to register your new accommodation in the local land registry. This costs 1–3% of the purchase price.