Assets

Home ownership: 鈥渓ocation, location, location鈥�

How much have you thought about the location of your future property? The facts about choice of location, including a checklist.

25 May 2022 5 min read
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Buying a property entails a lot of decisions: what sort of furnishings do you want? What should your new home look like? And how will you pay for it? Location is also a key consideration, both in terms of quality of life and the price of the property.

The saying 鈥渓ocation, location, location鈥� is attributed to Conrad Hilton, when asked what made his hotel chain so successful. But the phrase has also become a popular expression in the real estate sector.

What makes the ideal location?

A good location depends on general criteria, such as the amount of street noise or an unobstructed view, and on your individual circumstances, both now and in the future. Families will probably be concerned about the proximity of schools and leisure activities for their children. Older couples will want to be sure there is good healthcare provision in the area.

Locations that are considered attractive by the majority of the population have a strong impact on the price of a plot and thus of a house or condominium. A low tax burden in a municipality also makes the land more expensive, though this will be outweighed by the financial advantages in the long term.

Checklist for your dream property

Draw up a checklist to determine what factors matter most to you when it comes to choosing a location and a property as a whole. Consider the following points:

  • Distance to your workplace, nurseries, kindergartens and schools
  • Public and private transport connections
  • Infrastructure such as shopping and healthcare facilities 鈥� from drugstores, doctor鈥檚 surgeries, dental practices and hospitals to post offices, banks, and sporting and cultural amenities
  • The view, amount of sunlight, noise and other emissions, as well as risks posed by natural events such as floods or avalanches
  • The economic strength of the region and employment prospects
  • Tax burden

Price changes, growth or decline of the population and construction activity

Use our 鈥�Checklist when searching for a property鈥� as the basis for your own checklist. Population change should not be underestimated; the infrastructure of municipalities with a decreasing population will often deteriorate in the medium to long term.

The facts about your preferred municipality

Do you want to understand how property prices or population levels have changed in a municipality? Or how the location is perceived in general? How high are taxes? The 蜜豆视频 municipality guide is free of charge and answers all your questions.

Rural areas are becoming increasingly attractive

Urbanization was still increasing steadily until just a few years ago, and real estate prices in and around the major centers rose as a result. The pandemic and, more importantly, the increased trend towards working from home have led to somewhat lower demand for real estate in big cities while also making suburban and even well-developed rural areas more attractive.

While coronavirus will gradually become less important, the situation is different with flexible ways of working. Even before the pandemic, the Federal Office for Spatial Development assumed that the number of employees working occasionally from home could increase from 28 percent in 2015 to 37 percent in 2030. The increased trend towards working from home also makes a long commute to the office less of a problem, making properties in rural areas more popular.

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Statistics published since 2020 show a very clear increase in demand for properties in suburban and rural areas. For example, in 2020 the average price of a single-family home in the St. Galler Rheintal rose by five percent.

While urbanization has slowed considerably, suburban areas 鈥� which are much cheaper than city centers 鈥� are more attractive, as are rural areas with good transport connections. Peripheral and touristic regions are becoming increasingly appealing for buyers who want good conditions for remote working.

Price growth is leveling off

Pre-pandemic price growth was driven mainly by the major centers. Since the pandemic started, prices have been rising at an equal rate nearly everywhere. In 2021, the value of Swiss homes increased by six percent year on year. The price of luxury and second homes grew at an above-average rate of almost 10 percent.

Increased demand demonstrates that real estate is more attractive than in previous years. Demand has been underpinned by asset inflation, advantageous financing conditions and negative interest rates on savings accounts. The freedom to live further away from the office thanks to remote working has caused demand to increase away from city centers. Strong international demand has been apparent on the luxury and second home market.

Many of the factors that led to higher demand and prices will remain in place in the near future. Only the additional demand caused by the pandemic is likely to taper off throughout the year. The 蜜豆视频 Chief Investment Office expects real estate prices to increase in 2022, but only by half as much as in 2021. The price of single-family homes and of condominiums is likely to increase by around three percent and two percent respectively.

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