Expats move into the Swiss housing market: Juliette and Tom moved to the Zurich-area with their two young children less than a year ago from the UK. They aren't sure how long they'll stay. In December, however, they moved into their newly bought flat.

AuteurHancock, Julia
Fonction HOUSING SPECIAL

Less than 20 kilometres away, another British family never even bothered to look for a rental home when they moved to Switzerland even more recently, but instead opted to jump into the buyers market.

Executive relocation company Anchor Relocation Services, in view of the growing demand of their clients to acquire property rather than just rent a home, have linked up with a local Zurich-area estate agent.

"We have seen a noticeable increase in interest to buy, as more and more companies are transferring their headquarters to Switzerland and foreigners are arriving with local contracts rather than only expatriate packages," Doris Hautle-Lotscher, partner with Anchor Relocation Services, told Swiss News.

Resident foreigners keen for a foothold in the local Swiss housing market are but one of the factors that has been driving up house prices, especially in areas around key cities.

"While one cannot say that foreign buyers have had an impact on prices at a national level, it is deemed that this interest has had a role in helping bolster prices in key locations like Zurich and Geneva," said Dieter Marmet, a partner with Wuest and Partners, a Swiss real estate consultancy.

One of the reasons that this new interest in the market is remarkable is that Switzerland has traditionally been a rental market, with rates of home ownership that remain, despite the recent up-surge, among the lowest in Europe and the world.

Have prices peaked?

On a national level, asking prices for condominiums have risen some 22 per cent between 2001 and 2006, according to data supplied by Wuest and Partners. Single-family home asking prices have risen 14.3 per cent over the same period (See Graph A--Data from Wuest and Partners).

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An even sharper climb has been recorded in the affluent Geneva and Zurich areas.

Credit Suisse's Fredy Hasenmaile, Head of Real Estate Analysis, said the increase so far is a recovery from a crash in the housing market in the early 1990s.

"It wasn't until the end of the nineties that prices stabilised again, at a level that was roughly 20 per cent lower. Since then, however, prices have seen a robust recovery and in the condominium sector they have reached their former peaks or even surpassed them," Hasenmaile told Swiss News.

"Price losses were above average in Zurich and in Geneva, and these sub-markets have seen above-average price growth in the last eight years as a consequence. In Zurich, prices rose by some 25 per cent...

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