Europe’s migrant crisis combined with the EU’s economic woes has seen enquires for Swiss property skyrocket over the past year as investors look for safe havens. Many such queries are from buyers from Saudi Arabia, Qatar and the UAE, who have also snapped up huge swathes of prime property in London. However, buying property in Switzerland is more complicated. Swiss law prevents non-residents from acquiring residential property in many areas, including Geneva and Zürich. Applying for residency can take ten years to acquire, while citizenship could take even longer.
“There is huge interest in Swiss property from our Middle Eastern clients, but the law is a major factor,” Knight Frank partner and Swiss expert Alex Koch de Gooreynd tells GN Focus. “Senior Emiratis do not want to take residency.”
Commercial opportunities
He adds that the law doesn’t apply to commercial property, and this is where Middle Eastern investors are doing deals, particularly in larger cities. As an example, a UAE-owned company just acquired a major lakeside property in Geneva, which it plans to convert into a hotel.
While Switzerland is an established winter destination, resorts are adopting initiatives to make themselves more attractive in summer too — and thus more attractive to buyers. Non-Swiss may acquire smaller properties of up to 200 sq. m of living space — a measurement skilfully extended by developers. Furthermore, prices have been stagnant, making it a buyer’s market for now.
A new law, Lex Weber, was proposed in 2012 to restrict the number of second homes to 20 per cent in any village. “Resorts such as Gstaad and Verbier are already way over this limit, so construction stopped,” says De Gooreynd. “Investors were also concerned the new law might prevent re-sales to non-residents, so prices were squeezed.”
Legal confusion
His view is echoed by Paul Kleinekorte of luxury real estate developer Pure International, who says the confusion over the law has created a buyer’s market. “Any property existing or granted planning permission before March 12, 2012 can be resold to a non-Swiss if the owner has had it for more than five years. Any new property which is to be sold as a second home must now be given to a professional rental company and be placed on the rental market.”
Kleinekorte explains that re-sale properties not bound by the new law are likely to see the most financial gains when the market heats up. “Switzerland has been the most stable and the strongest currency in the world; as far as property investment we now have the clear direction and rules for new projects and there are plenty of permits for foreign ownership.”
Jeremy Rollason, Managing Director of Savills Alpine Homes, says a growing number of Middle Easterners are visiting elite dual-season Swiss resorts such as Verbier and Crans-Montana, often during Ramadan and Eid. He expects sales to pick up in these locations. “Asians — especially Chinese — favour Switzerland for its stability, security and lifestyle,” he adds. “Buyers are drawn to its independence outside the Eurozone and want exposure to a Swiss-based asset that they can use and enjoy.”
A Swiss chalet of your own
1 The Chalets d’Adelaide development in Grimentz, a picturesque Alpine village with the sunniest skiing in the country, recently launched. This is the last opportunity to purchase new homes in the resort, in line with the Lex Weber law. Properties will be serviced by a new boutique hotel, yet prices are half those of comparable real estate in Verbier. “We have seen enquiries for property in the area double this year,” says Giles Gales, Managing Director of Mark Warner Property. Units range from one-bedroom to five-bedroom duplex penthouse suites, and chalets. Mark Warner provides a management service with expected yields of 3 per cent. Prices go from CHF819,000 (about Dh3 million) for a two-bed unit to CHF1.6 million for a four-bed. Detached chalets start at CHF2.36 million. Markwarnerproperty.com
2 Savills has a gorgeous five-bedroom chalet in Verbier that is available to non-Swiss buyers. Chalet Ba’ Combe is priced at CHF6.9 million. Savills.com
3 Aylesford International has a duplex apartment in contemporary style with amazing lakeside views at St. Moritz. Chesa Staz is priced at CHF19 million. Aylesford.com
4 The same agent has 20 apartments priced from CHF1.5 million at Pontresina, in a fine 19th century landmark building at the foot of a dramatic mountain. Pontresina has a more relaxed atmosphere than its glitzy neighbour, St. Moritz, just five minutes away.
