6 ★ FTWeekend 9 November/10 November 2019House Home
Swiss propertyGeneva’s
prices are on the risethanks to a lack of supply
and a boost from corporatetax reforms. ByHugo Cox
B
lueCrest Capital, the hedge
fund led by billionaire trader
Mike Platt,announced last
month t was moving some ofi
its staff from London and
New York to Geneva. Will more of Lon-
don’s financial companies — and their
employees — consider a home in the
lakesidecityatthefootoftheAlps?
If they do, they will find prices on the
rise after a period of decline. The aver-
age price of a prime Geneva homerose
5.6 per cent in the three months to Sep-
tember 2019from the same period a
year before, according to Knight Frank.
Across the entire market, prices rose
4 per cent in that time. That rise in
demand isdue to falling mortgage rates
and a shortage ofsupply, according to
Maciej Skoczek of UBS’s wealth man-
agementdivisioninZurich.
Local agents say imminent corporate
tax reforms are boosting the appeal of
Switzerland’ssecondcity.Theeffectwill
varyacrossthecountry’scantons,butin
Geneva rom January 2020,f corporation
taxformanycompanieswillbecutfrom
24.2percentto13.99percent.
Lawrence (not his real name), a Brit-
ish financier with a large family, moved
from London to Geneva 10 years ago.
The relocation had nothing to do with
tax benefits, he says. “With the kids
growing up we wanted to try something
different. We could have moved to Sur-
reyorBerkshire.Insteadwecamehere.”
Hehasstayedbecauseofthecity’sfacili-
ties and friendly character. “It is a great
placetobringupafamily,”hesays.
In Geneva, a married couple with aLake gold dust
(Above) Geneva
and its lake;
(below) villa in
Collonge-
Bellerive,
(€3.9m)combined income of SFr200,000
(€181,600) paysabout SFr38,000
(€34,500) in income tax, according to
Skoczek. Swiss income taxes arelow,
and levied at national, cantonal
(regional) and municipal levels. Local
tax-raising powers mean funding for
facilities such as tennis courts, swim-
ming pools and subsidised restaurants,
saysLawrence.
Havingrentedfornearly10years,this
year Lawrence bought a house in one of
the villages on the northern edge of
Geneva, only a 15-minute drive to the
city centre. “Prices have come down a
lot. Beginning in 2012, we noticed prices
fell for four or five years nd since thena
theyhaveplateaued,”hesays.
The five-year data bear ut Law-o
rence’s observations. Prices for prime
properties may be on the rise now, but
they have fallen 9.3 per cent and themarket as a whole is up just 2.1 per cent,
according to Knight Frank. Skoczek
points to rule changes governing mort-
gages,thelastintroducedin2014,which
increased minimum deposit require-
ments to 20 per cent of a home’s value —
10percentofwhichmustbeprovidedin
cash(previouslyassetssuchaspensions
wereeligible).
Alex Koch de Gooreynd, who special-
ises in the Swiss market at Knight
Frank, says that the strong franc
also played a role, reducing demand
from buyers from abroad. “Prices for
older homes in need of renovation that
are not overlooking the lake have
falleninparticular.”
The pound has fallen 17.2 per cent
against the Swiss franc in the five years
to the end of October hile the euro isw
down8.6percent.Thishashelpedmake
Geneva’s prime homesexpensive forincomers, compared with nearby
European cities. The average €23,400
per sqm f or prime property is higher
than equivalent figures of €20,100
in Zurich, €19,400 in Paris and €13,500
in Frankfurt, according to KnightSWITZERLAND
BernGenevaGERMANYITALYFRANCEmaps news.com/©HERE kmFrank, although below the London
average of €27,990. The city’s priciest
homes, many of which arealong Lake
Geneva’ssouthbankinColognyandCol-
longe-Bellerive ith views of the waterw
and large gardens,often fetch more,
saysdeGooreynd.
In Collonge-Bellerive local agent Naef
is sellinga four-bedroom villa for
SFr4.3m. In the adjacent neighbour-
hoodofAnièresKnightFrankissellinga
four-bedroom house for SFr3.29m.
Thoseneedingless spacecould look to
Chêne-Bougeries here Naef is sellingw a
two-bedroomduplexforSFr1.595m.
Skoczek says current mortgage rules
effectively limit purchase prices to
between six and seven times a buyer’s
income. High prices mean that many
expats cannot afford to buy. “Many of
my friends rent. Buying in Geneva,
especially something nice and where
you want it, is hard,” says Jorun Baum-
gartner, a 46-year-old lawyer riginallyo
from Germany and now with dual
nationality. She moved to Geneva
15 years ago and lives with her husband
and son near the Place des Nations n ani
areapopularwithdiplomatsowingtoits
proximitytotheUN.
The Swiss National Bank interest rate
is currently minus 0.75 per cent, but
Baumgartner says she has yet to find a
mortgage with a negative rate.Her two-
bedroom apartment is close to the
botanical gardens and the lake and
just 10 minutes’ walk from Geneva’s
main station. Perhaps most impor-
tantly, it is good value. “We pay
SFr2,200(€1,997)permonth,including
a garage. The rent has not increased
evenafrancin14years.”i/B U Y I N G G U I D E
Flights connect Geneva with London in
1hr 30 min and New York in 9 hrs
1,491 homes were sold in Geneva in the
year to the end of October, compared with
1,486 last year and 840 in 2017, according
to Swiss government data collected by
Knight Frank. This year, 169sales were for
homes priced above €3.6mWhat you can buy for...
€1.8m three-bedroom apartment inA
Cologny
€4.5m four-bedroom house on a largeA
plot in Anières
€8.2m five-bedroom house facing theA
lake in Collonge-Bellerive
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