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Switzerland has seen sustained prices growth but it now slowing due to cooling measures
Switzerland has seen sustained levels of residential property market growth between 2008 and 2013 with house prices up 28%, the opposite of what has happened in many other European markets. Economic expansion, low interest rates, growth in real wages and immigration of wealthy individuals have all supported housing demand. The strengthening Swiss franc also raised their price in comparison to other currencies, according to a new analysis from international real estate firm Savills. However, price growth is now slowing, amid government efforts to cool the market by introducing stricter lending requirements. ‘The decoupling of the Swiss franc with the euro has seen its value appreciate and make Swiss exports more expensive, slowing the economy in general. Foreign buyers with Swiss franc denominated mortgages have been especially hit,’ said Yolande Barnes, director of world research at Savills. The report points out that Switzerland has one of the world’s strictest citizenship systems. Qualification requires 12 years of permanent, legal and notated residency, fluency in one of the official languages and integration into Swiss culture and community. On top of this Switzerland introduced new quotas for European Union citizens in 2013. Foreign buyers are also heavily restricted on residential property purchase with just 1,500 permits released a year, although the rules vary significantly by Canton. In Geneva the emphasis is on the rental market with some 80% of the population of the city doing so and the rental market is strongly pro-tenant, the report explains. ‘Geneva is an expensive city in which to live and there is especially strong demand for city centre apartments which are in short supply,’ said Barnes. Demand is fuelled in part by employees of the finance and business services sector on generous relocation packages, the report shows. Property prices in Geneva have grown 55% since 2006, compared to 27% across Switzerland. ‘These rates of growth are echoed in the rental market. High prices have put property purchase and even rent out of reach of many locals in Geneva, which counts itself alongside Zurich and Zug as one of the most expensive locations in the country. Each day 90,000 workers commute from neighbouring France to the city, a number that has doubled over the last decade,’ Barnes explained. ‘For those who can afford it and, non-nationals who can obtain a permit to purchase, Geneva offers attractive property in a safe, secure environment. The most desirable property enjoys lake or mountain views,’ she added. The report also looks at what is happening to property prices in the Swiss Alps which attract second home buyers from across the globe. The Swiss Alpine resorts of Gstaad, St Moritz, Zermatt and Verbier are among the world’s most exclusive, and expensive, with ultra-prime prices ranging from €20,000 to €30,000 per square meter. The report explains how these resorts have diversified beyond skiing to cater to many of the other demands of the super-rich. Designer shopping, Michelin starred restaurants and polo are all part of the offer. These… Continue reading
Recovery in property sales in Spain proving sustainable, latest data suggests
Homes sales in Spain are showing strong growth, up by 13.9% in the second quarter of this year following a rise of 4.4% in the first quarter, according to the latest data from the Ministry of Public Works. It is the six quarter in a row when sales have increased year on year, suggesting that the recovery in the Spanish real estate market is being sustained. It is also the second best quarter since 2010. However, the market still has some way to go to its pre-crisis level as sales are 58% lower than the peak of 2006. A breakdown of the figures shows that some 12.5% of sales were for new homes and sales increased in 14 regions, as well as in the autonomous cities of Ceuta and Melilla, and fell in three. The biggest increases were in La Rioja with growth of 44.2%, Ceuta and Melilla at 33.9%, the Balearic Islands at 30.1%, Cantabria at 29.4% and Murcia at 25.7%. Sales fell by 14.7% in Navarra, by 1.5% in Extremadura and by 0.6% in the Basque Country. Overseas buyers living in Spain accounted for 17.2% of sales while sales to non-resident foreigners amounted to 5%. Alicante had the highest number of foreign buyers at 4,141, Málaga 2,517, Barcelona 1,470, Madrid 1,173 and Tenerife 1,099. The sustained recovery is also confirmed in the latest figures from the General Council of Notaires, showing that the property market grew by 11% in July compared to the same month in 2014. The data shows that the Spanish property market has expanded in nine of the last 12 months with only January and February seeing sales fall. According to Mark Stucklin, of Spanish Property Insight one of the main factors behind rising home sales is easier, cheaper mortgage credit. There were 17,450 new mortgages signed in July, up 27% on the same month last year, taking the number of sales involving mortgage financing to 46%, highest level since the boom years in the middle of the previous decade. Prices area also starting to recover. The data from the official house price index published by the National Institute of Statistics shows that they rose by 4% over the 12 months to the second quarter of 2015. The Balearics saw the biggest rise in prices with growth of 7.3%, driven by a 7.8% rise in new build prices and a 7.4% rise in resale prices. Indeed, new and resale house prices have been rising since the second quarter of last year, and the trend appears to be picking up speed for both new and resale properties. But figures from the Notaries suggest that prices are not yet in recovery mode. The data from them shows prices down by 0.3% in the second quarter of the year. But Stucklin believes that there are reasons to be sceptical about the index. Compared to 2007, Spanish house prices are down 33%, according to the index with resale prices down 40% and new build… Continue reading
Survey reveals positive attitude to renting in the UK
The majority of tenants in the UK private rented sector are satisfied with their current landlord with only 5% refused a longer term tenancy, new research shows. Overall 65% of tenants believe their rental payment represents ‘good’ or ‘very good’ value for money and have positive attitudes towards renting, according to the study commissioned by Paragon Mortgages. The quarter two tenant market analysis, carried out by BDRC Continental, reported a rise in tenant satisfaction with 80% satisfied with their current landlord and 87% of tenants now regarding their rented property as their home rather than a short term arrangement. The research also highlighted that the average duration of tenants living in their current rented property in the second quarter of 2015 was seven years, with the typical total stay in the private rented sector being 12 years. When asked about their long term housing plans some 35% of participating tenants intend to remain within the sector and 24% intended to buy a house in the future, with the proportion of respondents citing the unaffordability of housing as the reason for renting privately increasing from 69% to 74%. ‘This research provides a valuable insight into the sector. There are many surveys of landlords and many academic reports on the PRS. There are, however, too few surveys that poll tenants directly on their experience of renting privately,’ said John Heron, managing director of Paragon Mortgages. ‘This survey has identified high levels of tenant satisfaction and an appreciation of the good value that rented accommodation can offer across the country. It is more disappointing though to see that affordability constraints are impacting negatively on future choices in housing with less than a quarter of tenants expecting to buy their own home in due course,’ he added. Continue reading
