Luxury property in switzerland

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A closer look at Swiss housing market trends

Last year the Swiss housing market rose at its fastest pace since 2014. In contrast, nearly 70,000 rental apartments sat empty at the end of 2019, roughly double the rate of five years ago. Read more on this and investors' hunt for real estate investments in the ۶Ƶ Real Estate Focus 2020.

Property in switzerland

Key real estate trends that direct investors are focusing on

Investors are particularly keen on niches related to global megatrends such as aging, digitalization, individualization, globalization and urbanization. These exploit the fact that in future, more and older people will be living in smaller residential units in cities, flexible forms of renting will be increasingly popular and the importance of the last mile to the client will rise.Properties designed with these needs in mind offer investors the prospects of long-term income growth.

Digital estate

Co-working

The amount of co-working space is growing rapidly. In a flexible world of work, demand for office space that can be rented flexibly is rising.

Globe estate

Short-term rentals

In popular tourist cities, using apartments as de facto hotels is a way of generating considerably higher rental income than with conventional tenants.

Individual estate

Micro apartments

One-person households have become the commonest form of household at present in Switzerland, accounting for more than one third of the rental market.

Accomodation

Student accommodation

Student apartments target the rise in international student numbers. The most attractive locations are university towns with a shortage of apartments and where students’ willingness to pay is correspondingly high.

Aging

Retirement homes

The rising need for care among the elderly coupled with demographic trends suggests a steep rise in demand for retirement homes.


Are niche investments risky?

Supply is growing too quickly

Number of co-working establishments worldwide, in thousands and share of operators that are not seeing an oversupply in the local market, in percent

Oversupply

Supply is growing too quickly

Trend in the number of octogenarians in Switzerland, hours of Spitex care provided and the number of beds occupied in care homes, index 2011 = 100

Graph

Revenues are (still) too high

Number of self-storage facilities in Switzerland (left-hand chart) and annual rents for commercial space, by type of use in CHF/m2(right-hand chart)

Comparison graph

Key investor takeaway

Not every real estate trend should be seen as an invitation to invest. Even if higher returns are achieved early on, this can be a temporary phenomenon. In the case of niche investments, performance depends largely on the respective real estate cycle.

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Discover more Swiss real estate trends, investing for the long-term, luxury properties and much more.

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