Switzerland is one of the most closed countries for foreign buyers. Without a residence permit in most of its territory, nothing will be sold to you even for very large sums of money. The authorities allow only up to 1,400 properties per year to be transferred to foreigners, and even then with many reservations and conditions. One can understand the Swiss: Zurich is annually recognized as the best city in the world for quality of life, Geneva is in second place, and Bern is in ninth (Mercer HR data). And if not for the legal barriers, too many would want to live and invest here.
However, let's refrain from generalizations. The concept of a 'Swiss real estate market' as such does not exist. This country is too diverse: there are four language regions, 26 cantons, and 2,900 municipalities. They differ not only in landscape, level of economic development, and the procedure for apartment valuation, but also in legal practices regarding property matters. What are the general restrictions? First, according to the Lex Koller law, which regulates the sale of real estate to foreigners throughout the country, a foreign family can buy one residential property with an area of up to 200 sq. m and no more than 10 ares of land. Second, if you are not a citizen of an EU country and do not work in Switzerland, then as an individual you can mainly apply for resort areas specifically designated by the authorities.
Further differences begin. For each canton, the federal authorities set sales quota limits: some get more, others less. But the cantonal authorities are free not to use these quotas at all, which is what happens in many places. Mainly, the German-speaking cantons 'freeze' sales. It is believed that the French-speaking cantons of the country are generally more loyal to foreign buyers than those bordering Austria and Germany. Other important things for foreign buyers also depend on local administrations: the amount of taxes, the types of housing allowed for sale, the ability to derive income from the property, and, most importantly, the boundaries of resort areas.
According to Credit Swiss statistics, currently on average across the country, cantons use no more than 70% of their allocated quotas. And even this result is mainly due to the leading territories - the cantons of Valais, Vaud, and Ticino. The latter are considered the most loyal to foreigners and, fortunately, popular summer resorts Montreux and Vevey, as well as the alpine ski centers Verbier and Crans-Montana, are located there. Excellent recreational opportunities and high demand from an international audience dictate the price level. The cost per square meter in well-located apartments in Verbier can reach €11,000. However, in small towns in the Valais Alps, you can find properties half that price.
Now Switzerland, which has long isolated itself from the rest of Europe, is gradually beginning to change its policy regarding housing sales. The European press reports that the most loyal cantons are lobbying for amendments to Lex Koller, up to its complete abolition and equalizing foreigners' rights with Swiss citizens by 2015. According to Credit Swiss estimates, the potential demand for a 'second home' in Switzerland from citizens of other countries is about 10,000 housing units per year. So in ten years, buying an apartment in Geneva might become a reality.
Housing prices in Switzerland grow more than moderately: by 4-5% per year on average across the country. They have not changed much since the 1980s. But this does not stop those who want to invest money here, because the 'buy-sell' measure has never been applied to Switzerland. There are other markets for risky operations, and people come to this country to lock in the profit obtained. For a private individual, this means buying a chalet or an apartment. You can rent them out to tourists for part of the year, earning 5-7% per annum (if local legislation permits).
The intangible benefits of investing money in Switzerland are banal: reliability, safety, prestige, the opportunity to spend time in one of the most beautiful places in the world, etc. It should be noted that a residence permit is not issued upon the purchase of real estate in Switzerland, and additional efforts will be required to obtain it. The owner can count on an annual multiple-entry visa with the right to stay in the country for 90 days per year, and for health reasons, up to 120 days.
By selling a house to a foreigner at their resort, the cantons seek to stimulate tourism. Therefore, renting out housing is often only possible for short-term rentals, usually through a management company that manages the residential complex. For the same reason, authorities may levy a tax on rental income even if the property is vacant all year (the amount is calculated from potential rent). However, as 'Real Estate Digest' notes, compared to other countries, taxes for homeowners in Switzerland are not burdensome at all - total annual fees rarely exceed 1-1.3%.