The coronavirus pandemic has sparked a surge in demand for luxury real estate in Switzerland, which looks unlikely to end soon, a study shows.
Both prices and the number of sales of luxury real estate in Switzerland have risen sharply due to the coronavirus pandemic, the «Luxury Property Focus 2021» (in German) report by UBS showed Wednesday.
Prices in the luxury segment rose 9 percent year on year in 2020, more than double the 4.4 percent overall in the Swiss residential real estate market. The number of transactions in the sector rose by over 50 percent to more than thrice the five-year average.
Foreign Demand
The bank said demand from foreign investors in particular had grown. The majority of foreign buyers were from France, Italy and the U.K. Switzerland was seen as a safe haven because of the strong franc, the limited amount for fresh luxury housing supply in particularly desirable areas as well as good health services and low taxes.
UBS added that less restrictive measures to counter the spread of coronavirus in Switzerland than in other countries also played a role.
The wealth of potential luxury home buyers also increased due to the economic recovery from spring 2020 on and the rise in stock markets.
No End in Sight
These drivers of growth in the market are showing no signs of going away in the second half of 2021, the report said.
UBS is expecting above-average turnover and localized price rises, albeit at a slower rate.
Lake Geneva Most Sought After
Prices of luxury properties rose most near Geneva at around 16 percent, while the rise in Alpine regions was 10 percent.
The most expensive place in Switzerland was Cologny on Lake Geneva, according to UBS. The prices of high-end homes there start from 36,000 francs ($39,270) a square meter, meaning a 400 square meter villa would cost 14 million francs.
Prices of luxury holiday homes are highest in Gstaad at over 30,000 francs a square meter. Prices are not much lower in St. Moritz.
