Switzerland failed to attract a significant amount of wealthy real estate purchasers throughout 2011, but Knight Frank reports that the tide has turned in the latter half of 2012 as more well-heeled buyers return to the market. The lapse in purchases resulted in an average 10% downward price adjustment that has many wealthy foreigners seeking value there despite additional tax fees and government regulation. Prime locations that are seeing particular interest include Collonge Bellerive, Cologny, Champel and certain areas of Geneva. For more on this continue reading the following article from Property Wire.
Tax and legislative changes in Switzerland are not likely to put off people from buying property in the country, it is claimed.
The world's wealthy are encouraged by more realistic pricing in the residential market and an apathy that descended in 2011 seems to have disappeared, according to Alex Koch de Gooreynd, head of Knight Frank’s Swiss desk.
Since spring 2012 prices have adjusted by as much as 10% in most areas to take into account the lack of activity in 2011 and the level of inventory available and as a result buyers have started to re-enter the market with particular activity over the last two quarters of the year.
However, while activity in the market has continued to improve in 2012, there are apparently a number of key factors which are having, or could have, a significant influence on the market.
There are concerns regarding the forthcoming evolution of future laws and taxes. The initiative to stop, at a federal level, all lump sum permits is a cause of concern for some buyers, while the Lex Weber, which restricts towns to a maximum of 20% of secondary residences, is also bringing some uncertainties to the market before its introduction in January 2013.
‘On a global level, we're told that the ongoing long term concern that has arisen as a result of Rubik agreements, which provides for the anonymous regularisation of assets stashed by residents of some European countries in Switzerland, has driven a few to leave,’ explained de Gooreynd.
There has however, been an increase in demand for prime locations in Switzerland. Cologny, Collonge Bellerive, Geneva's old Town and Champel for example, remain the most sought after areas and, as is the case in London, they have been better placed to maintain their values.
News that some multinational companies have reduced staff numbers in the country has also had an impact on the type and number of buyers active in Switzerland. However, there has been an increase in the number of buyers relocating from emerging countries seeking a more secure environment for their families and to develop their business interests into the western markets.
‘For 2013, expect this limited but positive demand to continue with realistic pricing remaining at the forefront of buyer's considerations and increasing choices available in the market,’ he added.
This article was republished with permission from Property Wire.