The Savills Blog
It’s been more than a year since we were able to travel freely – if at all. But there is light at the end of the tunnel and some day we really will be able to pack our bags and reach for our passports again. While we wait, our local agents remind us of what we’re missing.
In 2019, 17.75 million people passed through Geneva airport, with this number unsurprisingly, dropping to just 5.6 million in 2020. So far in 2021, this trend has continued, with passenger numbers down nearly 70 per cent on 2020. But even in a ‘normal’ year, how many of us actually stop to take in the beauty of the city itself? With its cobbled streets, the grandiose of its Belle Époque buildings, luxury hotels, jewellery boutiques and that famous water fountain, there is more to Geneva than just its airport.
Geneva sits at the heart of Europe and serves as a hub for onward travel to France and Italy, as well as within Switzerland. While people often think of Geneva primarily as the home of the UN’s headquarters, plus many other NGOs, it is also the European base for a diverse mix of International companies. These range from private banks to luxury watch manufacturers, health, biotech, pharmaceutical, food and trading multinational companies.
Rent controls and restrictions on foreign buyers mean that the property market is less prone to sizeable market swings, although a shortage of high-end new build schemes can lead to upwards price pressure. The property market in Switzerland normally mirrors GDP growth which is typically in the range of 1-3 per cent, but exceptional lakefront property is often detached from this national trend and can see much greater price movements. For example, a ‘pieds dans l’eau’ property can command premiums of anything between 50 per cent and 100 per cent of a similar quality property further in land.
Switzerland has long held favour amongst wealthy buyers for its attractive tax status, as well as its quality of living. International buyers looking to domicile in Switzerland can benefit from the forfait or lump sum tax arrangement, which is a fixed annual amount, irrespective of their worldwide income. Next time you play golf at Geneva Golf Club, don’t be surprised if you rub shoulders on the 19th tee with an international rock star or a freshly retired start-up founder – both of whom bought villas close by earlier this year.
Luxury Places sell and rent property the length of Lac Leman, between Geneva and Montreux. Lausanne is very popular amongst expats, with its International schools, relaxed lifestyle and proximity to the ski resorts such as Villars, Verbier and Crans Montana. Property here is generally more affordable than in Geneva, and just a little further along the lake in Montreux, non-Swiss residents may buy property up to 200 m sq as a second home.
So how has the pandemic affected the market? Like many agents, we have seen a trend for more space, both inside and out and strong demand for lakefront property. This has meant keen competition for the best property – prices have increased 6 per cent on average during the last 12 months for prime villas with lake frontage and up to 9 per cent on the left bank of Geneva.
Will this trend continue? If International travel opens up a bit more in the second half of the year, as we expect, then we envisage a greater percentage of foreign buyers coming to visit property. For now, 80-90 per cent of transactions are to domestic buyers, but this is sure to change in the coming months.
At the end of May, Switzerland removed quarantine and testing restrictions to inbound passengers from third countries, including the US and UK*. Its lakes (and mountains) remain a glorious place to visit during the summer months, as advocated by Roger Federer and Robert De Nero in their recent promotional video for the Swiss Tourist office – it’s well worth a watch.
* We strongly recommend checking the latest government advice and announcements prior to booking travel.