The trends seen at the end of 2020 are being confirmed, and even accentuated. The pandemic has caused a sharp increase in demand for luxury real estate, which has caused prices to skyrocket by about 10% over the past year. Switzerland is strengthening its position as a preferred destination for international clients. We therefore expect the upward trend in prices to continue in the second half of 2021.
- Indeed, in the canton of Geneva, the cumulative amount of sales published in the official notice sheet during the first half of 2021 that exceeded CHF 4 million, i.e. 59 transactions (18 of which were worth more than CHF 10 million) since January 1, 2021, is up sharply compared with previous years. With the high-end residential market at its peak in terms of valuation and demand rising sharply after several years of stagnation, we are back to the highs of 2010-2012.
When the price is in line with the market, and therefore the demand, for beautiful apartments with terrace or garden, private mansions in the Old Town and in the Eglise-Russe, beautiful houses in Cologny, Vandoeuvres and Chêne-Bougeries in particular, as well as all the waterfront properties, the time required to complete sales has never been so short.
Statistiques SPG One SA 2021 ©
- In the canton of Vaud, sales of luxury properties and apartments have, for their part, shown a more reasonable increase, as demand is better distributed regionally and more and more buyers are expanding their search radius. In our market segment, exceptional properties are experiencing a dynamism comparable to that of previous years.
On the other hand, exceptional, but also historic properties are coming onto the market for the first time in several years; while for this type of object supply is parsimonious and demand very sustained.
Statistiques SPG One SA 2021 ©
- In most of the ski resorts where we are based (Gstaad, Verbier, Crans-Montana and Megève), we are seeing a largely positive development, as the attraction for the acquisition of a second home, but also for primary residences, has been particularly strong. It is in Gstaad and Verbier that the progression is the most marked, because the supply is very low and therefore the prices are soaring.
In Megève, the real estate market is experiencing a clear revival of interest on the part of the French clientele, but also international, particularly Swiss (more than 50% of buyers) who have finalized the purchase of a second home.
Statistiques SPG One SA 2021 ©
These increases are due in particular to the influx of foreign European clients wishing to take up residence in the Lake Geneva area, but also in the Swiss Alps, which, thanks to our affiliation with Christie's International Real Estate, constitutes an important part of our buyers. Working with the largest law firms in the area, but also with certain family offices, even if the international clientele has been present, we conclude that it is the already resident clientele (established for 5 to 8 years) that has replaced - and far exceeded - the international buyers in this luxury real estate segment.
This strong growth in luxury real estate sales is explained by:
1) the appeal of stone - a safe haven: buyers are aware of the stagnant nature of the real estate stock in French-speaking Switzerland (no more construction in the beautiful districts of Geneva) and its structural nature as a shortage market, and the low attractiveness of competing assets.
2) the appeal of stone - the value of daily enjoyment: many buyers wish to change their residence in order to benefit from generous exterior surfaces (terraces, gardens) and/or additional elements of comfort (outside the city centers).
The health crisis that we are experiencing has clearly changed the way we understand our living environment and our demands on it.
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Maxime DUBUS - July 2021
