Dear,

You can contact me at 078 8131303 we are running a consultancy company in geneva. We have in house independent specialist for real estate, mortgages, insurance etc.   We can guide you throug the whole process...

Looking forward to hear from you.

Kind regards,

Raymond Harmeling

See my posting by searching "real estate" and "Geneva". I would strongly advise you to get a good lawyer and make sure you check all papers (which will be in French) very carefully. Inmy experince best real estate agents is NAEF, but there are some smaller ones. worst experiences have been with Regie du Rhone and Comptoir. 

Curtis what kind of bad experience are you talking about exactly ?

The regie should have virtually nothing to do with the legal aspects of purchasing , which are handling by a notary representing both parties.

This is probably not the best time to buy something in the area. The prices are topping and specialists say there is a real estate bubble.

Given the mortgage conditions here there is a risk of being in negative equity after a few years if the prices go down by 10-20%. This could be a huge problem in case you need to move and sell.

To me the market is not sound at all.

See U

It is a shame that you missed the seminars because they were very good.  Perhaps you might contact Nir to see if you can get copies of the materials handed out?  For a first step, I remember that much depends on the type of residence/working permit and what citizenship you have.

Good luck!

hi - you were talking about seminars on real estate - who can i contact therefore?

Thkls

xavier

There were a series of them, and I believe Nir was one of the organizers.  Perhaps he would be the first stop to check?

hi thks but who is Nir ? dont have his contact details - thks

Oh sorry!  "Nir"  is Nir Ofek, one of the founders and sparkplugs behind Glocals.  He can be found under the Members list when you search his name.

His picture has this funny thing on his head.  For a while, I thought it was some sort of medical condition . . . . after meeting Nir, I am convinced that it is . . . . poor soul! :-)

For those who are interested about the topic, I posted an event for a presentation on the Acquisition of private real estate in Switerland (8 June). During the event, we will present and discuss the legal and tax aspects.

Please refer to "things to do"

Please find below the details of the event about Acquiring a private real estate:

http://www.glocals.com/#/things-to-do/geneva/45968.htm

Missed yesterday's seminar but was told:

- although LIBOR interest rates will remain low, 5-10y fixed interest mortgages will go up to ~ 3% during 2013, according to UBS

- prices in Geneva region are going down 15% in 2012 over 2011, NAEF said

- prices may further decline hitting 20% over 2011 prices (NAEF)

20% is a typical down payment ... sorry for those who bought last year, they lost their capital if they were to sell now!

Didn't I say this about a year ago...when some on this list scoffed.But maybe the most relevant question is why did a foreign lawyer understand or at least describe the market more correctly (honestly?) than Swiss experts looking at the same market at the time? Buyer beware in Geneva. In the last years friends have come to me with all sorts complaints about tricks from estate agents ranging from blatant lying about square meters of a property (and then claiming that the official register was wrong) to those trying to sell sub-divided property that cannot legally be sub-divided. Buyer be very, very wary in today's uncertain market.

Don't be surprised to see property prices plummet up to 50% or more in next few years as huge IGO cutbacks lead to many more properties coming on to the market. But likely, in my view, there is a good expectation of recovery over 10-20 years, unless UN moves out of Geneva to a cheaper operating environment in which case Geneva real estate prices could drop more than ....well you guess the deepth.

Hi,

Finding a place here to buy is difficult but possible. The buying process is easy if you are a permit B holder. Upon signing a reservation agreement with the seller and then countersigned, the sale contract is drawn up with a notaire.  With your bank's agreement and minimum 20% funds everything is very smooth.

Don't expect a sharp drop in prices - this is Switzerland and more importantly, Geneva. Property here is like gold and a very good investment.

Also, IGO cutbacks will empty rentable apartments for which there is always another tenant, not those for sale.

I disagree. There will be a sharp drop in prices in the next 3 years in the range of 20 to 50%.  We have heard " This is Geneva. Property here is like gold and a very good investment" over and over again before and same thing happened.  People used to say this is Tokyo there is no where to grow_ right? Below is from wikipedia:

Prices were highest in Tokyo's Ginza istrict in 1989, with choice properties fetching over 30 million yen (approximately $215,000 US dollars) per square meter ($20,000 per square foot). Prices were only marginally less in other large business districts of Tokyo. By 2004, prime "A" property in Tokyo's financial districts had slumped to less than 1 percent of its peak, and Tokyo's residential homes were less than a tenth of their peak....

Kirk, this is not about how 'easy' or 'difficult' the purchase process is.

Buying gold, shares, lottery is also 'easy'. The question is, how 'safe' is this as an investment?

It is also not about what one 'expects' or not. If the sales director of a large real estate agency like NAEF says in a public meeting that prices HAVE dropped 10-15% and that they will reach 20% in Geneva region, then this is more a fact than a belief.

As you say, assuming the bank agrees on the price (which is a completely different story), you can buy with 20% downpayment and 80% mortgage. Which means, a leveraging factor of 5. Now, a 20% price reduction would be 100% loss of your capital. It's certainly a 'sharp drop' in your investments

According to your previous posts, you just bought recently in Geneva so you understandably may not be happy to read how the market is evolving..

Hi, I don't think anyone can guarantee how 'safe' anything is, that is the nature of investing. We could simply agree though, that demand is very strong for property here, whether renting or buying?

Real estate agents may predict a decline to encourage you to invest; they would like you to hold out with them so they benefit and that is normal. 

The bank evaluates the purchase price and makes a recommendation; a mortgage is in any case based on their figure, not the selling price.

Not sure that the 1989 to 2004 tokyo scenario is quite the same animal as Geneva in the next 2 years.

If you were to buy in say, France or Switzerland, what would be your gut instinct on where to buy?

We agree that there is no guarantee on the safety of anything :)

You asked: If you were to buy in say, France or Switzerland, what would be your gut instinct on where to buy?

My answer is: I would not buy property in Geneva unless it was in good condition, well-placed, and offered for less than 9,000 CHF per square meter.  

You wrote: Don't expect a sharp drop in prices - this is Switzerland and more importantly, Geneva. Property here is like gold and a very good investment.

Hi Curtis, You seem quite an authority on this matter, so I'm sure you don't need me to do the math.

Best of luck!

You said: "Real estate agents may predict a decline to encourage you to invest"

All, The only news that is going on the side of the speculators is the expected influx of french millionaires to arc lemanique due to changing tax laws in france. Here is the article. Just wanted to get your thoughts:

http://www.tdg.ch/economie/millionnaires-francais-comptent-s-installer-suisse/story/27944462

This has no impact whatsoever on the main stream housing market. According to the article, a lawyer is usually dealing with 10-15 french millionaires a year. This year, it's 17 so far. Compare this to the 'normal' immigration which is in the order of thousands per year.

More relevant, in today's Neue Zürcher Zeitung, there is an article about the stagnating  / falling housing market around Lake Geneva, where the 10-15% downturn are also cited by other sources than NAEF.

This "rich people will save the housing market" meme keeps replaying over and over and over again.  They said the rich would save Japan, they said the rich would save Dallas, they said the rich would save Vegas, and they said the rich would save Southern California.  Here's a news flash: The rich do not become rich by foolishly pissing away their money.  The professionals (the ones who truly know what they're doing) have seen too many idiots on the playing field then quietly picked up their equipment and went home a long time ago.

Any update on current outlook one year later?  They say the prices now are stabilized.

If you want an example of how cheap homes can get when jobs dry up, look at the leafy suburbs of Detroit.  Take this 5 bedroom luxury period home priced at $83,000. http://www.trulia.com/property/3116569905-570-Arden-Park-Blvd-Detroit-MI-48202#photo-1 

As for Swiss prices, there seems to be an ongoing influx of foreign firms coming in to replace those which are leaving or downsizing.  This is a help.   The big danger will be higher interest rates.   If rates go from sub 2% to 4% it will look a lot less attractive to buy compared to renting.

There is more luxury properties on the market now than at any time in last twenty years. Some still at speculative prices, but also some at bargin prices. But few people have the money to buy them and thsoe who do aren't jumping at moving to Geneva or Switzerland and don't see them as good speculation investments. 

In 2013, real housing prices have generally dropped about 5-10%. To see this you need to look at actual buying prices, which are often 20-30% below asking prices. Realitors and 'particuliers' continue to ask high prices and that is why prices over 10,000 CHF per squre meter remain on the market for months or years. I make it a habit to advise peopel to offer 10,000 CHF per square meter or less and most buy at below 10,000 CHf per square meter.

My personal prognosis (guess) about the property market is that it will continue to fall before leveling out. There are too many realitors asking too much and not getting buyers. There are consolidations going on among real estate firms, but also some new ones. Although banks might hire about 100-200 new employees this year, UN staff atribution is higher than this and many local staff are moving out of Geneva as they cannot afford to retire in Geneva. Also watch out for another sharp UN cut-back or the moving a large UN entity or part of one out of Geneva due to the Swiss cst of living and calls for equal opportunity for developing countries that offer better value for money for UN. In other words, I expect a few more years of rough ride in the Geneva property market.

Things are going to get very interesting when mortgage rates revert to the mean.  Property demand without financing capability is no different from tossing a penny into a well and it's just as effective at propping up the market.

Surely if there is demand for property then there is financing behind that demand - not sure I understand your point on demand without financing.

What I understood so far - time will tell. Also, market itself with high degree of volatility.

I was monitoring myself the market in Lancy-Onex area. And I see that PPE apartments which could attract some interest were sold with a little discount. One example, based on cross-check with registre fonciere - shows that 5 room appartment advertised around 1.25Mo was sold for 1.2Mo. Another one, I cannot say for sure - was originally advertised 1.3Mo but after some time immostreet listing was showing decrease in price for about 50 thousands CHF and after that during the couple of days it is disappeared. Which makes me believe it was sold with the new price. But both were quite good.

Also, new PPE promotions (normally 1.3Mo for 5 rooms) with target end of construction date in 2015, I believe advertised with very small possibility for bargaining.

My point is that wanting to buy and being in a position to actually carry out the purchase are two different things.  You can want want want but when the bank says no no no to a 500k CHF mortgage because a 6% interest rate makes for a massive monthly payment that sends the prospective buyer's DTI ratio to the moon... then the house sits on the market unsold.

As of today, rates are low and the average homebuyer with an average income can lever himself into a pretty large mortgage.  What happens when rates go up and lending standards dictate that this same buyer would only be approved for a 320k mortgage?  Now what?  Will they shake 180k out of a money tree?  Or will they keep renting?

When you consider that interest rate movements impact everyone who isn't bringing all-cash to the table, you can see how this might play out across a broad marketplace.

Dear All interested in the real estate topic

There is a real estate related seminar in Morges on 2nd December.
(number of participants limted to 20)

The following questions are going to be addressed among others:

This workshop is tailor-made to its participants based on a pre-event survey. You can sign up here, registration will close on Wednesday 27 November.

Could you send me or post Assimina Walther's CV? I am always supicious of people trained in law, who don't say how or where? Is she a lawyer? What exactly are her qualifications? What banks or insurance companies does she work for and in what capacity? What has she published and where? I am not knocking her or WIT, but I really don't see any hard evidence of this programme's value. Seems, like some relators in Geneva, what is being sold might be merely smoke and mirrors.

Right now the Geneva real estate market is very volaitile, in my opinion, so where you get your advice, especially when you pay for it, is a worthwhile question to ask yoruself if you are going to buy.

My point is that if a buyer feels the market will decline, then the seller may be more willing to sell now, rather than later. Thus the agent encourages you to invest.

Sure, but I was only talking about demand that has the cash behind it - the ability to invest. Not those who have to scrape everything together at the bank.  

But maybe you are right in that the demand comes mainly from those who cannot afford to buy.

The "rich people will swoop in with their all-cash offers and enforce a price floor" sentiment has replayed over and over in every overheated RE market.  So has "this area is different" and "our market is special because we have more rich people here."  Prices eventually revert to the long-term trendline.  Always.

The prices are volatile right now and are likely to continue for some time. From my personal experience I saw buyers (buying for investment or one might even say speculation) in 2103 turn small profits after negotiating about a 20% discount on an asking price for about 11,000 CHF per square meter and one lose big in trying to turn around a residential aprtment building bought in 2012 and sold at about a half million loss in 2013. The latter sold because he feared a bigger lose if he had held on longer.

There are som places like the Grand-Pre project which are trying to sell for 15-16,000 CHF per square meter, but given the quality of the place and the market, my guess is that anyone buying a flat there for more then 12,000 CHF is going lose money if they have to sell in the next ten years...at least they have a 10 year mortgage with an interest rate above 2%, which is likely for a normal buyer.

A speculator might fare better, but given that there is likely to be a surplus of properties on the market in the next five years, I would doubt it. Right now high price properties (>3mo) are often selling below (or a least getting offers) much below asking prices based on annual 5% climbs in prices.

Thus i want to ask, where are the rich going to come from as foreign capital is leaving Geneva? Can a few luxury buyer keep the market healthy (or on steroids, as it has been in Geneva since the early part of this century)? 

Below are just some antedotal notes and tips about purchasing real estate in Geneva, Switzerland. They are based on what I have witnessed and heard from others who I trust. I hope sharing these might help new house buyers:

1. Most offers on the market right now are 10 to 20% overpriced and prices are dropping. This is in part due to increased restrictions on bank's ability to give mortgages. Often realtors will not want to decrease their prices because they apparently have to keep up an average cost per square meter PPE, especially in new places. However, you might be able to negotiate perks such a free furniture with a show apartment, Notary fees (could be about 50,000 per 1 million of purchase price), etc. Also don't believe you can negotiate the prices of new houses or apartments, you can and I know people who have. I still think that anything over 10,000 CHF per square meter PPE (Swiss calculation, which includes half of walls) is too much unless the property is really extraordinary. Be careful that many relators say a property is a luxury property, but it is not. Check how it is finished. Compare the quality and price of different products. Are the materials really luxury? How much do they budget for inside finishing? My yard stick is at least 50,000 CHF for moderate size luxury kitchen. Check prices for properties in the neighborhood where you are looking. Check with appliance shops--smaller ones are often best--to ask about the quality of different brands. They are often very willing to discuss this with you. Also check the reputations of the builders.  

2. For your mortgage, most Bank post rates so you can compare and negotiate. UBS is an exception. Its rates are similar to Credit Suisse, but good luck trying to find them online. Moreover, UBS is the most stingy Bank in negotiations and, at least I see, little added value in their expertise or lack of it. Still they might be the pace for you if you do investment banking with them. Other Bank's give better rates and perks like not charge for setting up the mortgage (at least 350 CHF at UBS), free credit cards (UBS actually started charging one person I advised more for a credit card after taking out a mortgage). Credit Agricole has the best rates, but unless you live in France or have millions to invest with them will not want your banking business, but they will still give you a mortgage. The Postbank has been the most reliable and best value for money. There rates are not great, but they have relatively low fees and offer pretty good services. If you are coming from the US or UK, in my experience, you will get much worse banking service in Switzerland, including in obtaining and servicing a mortgage. It is indeed odd to me that while Switzerland is known for its banking industry, the service does not seem to have earned that fame. Maybe the people I deal with just aren't rich enough for Swiss banks to care?    

3. Not all realtors are alike. My worse experiences have been with Comptoir Immobilier and more recently with Gerofinance-Dunand SA. The reason Comptoir Immobilier is on my list is that they were often very unpleasant to deal with and that after holding one friend's deposit for several months they unilaterally pulled out of the sale. The reason Gerofinance-Dunand SA is listed that they made oral representations and then reneged on them in the written contract. For example, one G-D agent told a buyer thate he selller would pay the notary fees, but then partially reneged on this oral promise with a small stipulation in the contract that the buyer did not notice. I don't like dishonest Swiss businesses and luckily don't come across too many of them, but when I do I avoid them like the plague in the future.

4. Similarly not all Notaries are alike, although Notary rates are relatively the same, but the quality of Notary's work and client support varies. I have found Necker, Christ, etc. one of the best, and Terrier and Co. is also okay, but no really willing to get to involved and sometimes flipant in reponding to questions. This only my personal opinion. For the it is the preceived competence of the notary, the time he or she gives clients, and the consideration he or she shows to a client that is important.

5. It is my sense that there are an increasing number of new and renewed properties coming on to the market in Geneva. There are numerous developments in Genthod, Grand Saconnex, and even the centre of Geneva. Often these projects have interesting perks such as being Minergie. Nevertheless, you should be careful in examining what you get because here are different Minergie standards and some are slightly better than non-Minergie, while others are much better in terms of lowering CO2 emissions. As noted above, more and more agents are saying properties are luxury, when I would certainly not agree with them. 

This advice comes from an international lawyer of about 30 years experience and although not specializing in property law or transactions I sometimes help friends on property transactions in Switzerland and elsewhere. These comments reflect only my personal opinions and do not constitute any form of legal advice. For more details or seek advice on international transactions you may always contact me through glocals. Hope these antedotes and tips help.

Personally UBS give super deals, they waive set up fees and re-mortgaging fees, discount the rates even further than the current record lows and notaries fees are capped for CASAtax transactions etc  

I would say the difficulty for most people is finding a place!

Kirk...maybe that was in your case, but they offered none of the things you mentioned to five different buyers who are friends. My list of best mortgage places (based on my assessment of rates, service, offers, fees, & transparency):

1. Credit Agricole

2. PostFinance

3. Migros

4. MoneyPark

5. BCGE

6. Raiffeisen

7. Coop

8. Credit Suisse 

9. UBS

10. Valiant

I would be interested to see other's lists. I realize these are subjective, but even subjective advice can be valuable.

Unfortunately I missed the seminar again (this last June) as I was out of Geneva.  

Nir, could you please organize them more often?  I'm sure there is a lot of other people that will attend and will be happy to pay something for the venue.

A question: I've heard that you can get mortgages over 50 or 100 years in CH. Compared to France, this makes you able to afford a more expensive apartment provided you are able to pay 20% of the full price upfront ("fonds propres").

How does it work? If anybody has more info or experience about it I'd be eager to hear.

Thanks in advance. 

Hi there

It is true that there is a relaxed attitude to an exact repayment date. This is because there is a tax advantage to maintaing a mortgage rather than paying it off; in that the annual interest is deductible and also, only the net equity in the property is subject to wealth tax.

However, the reason this doesnt generally result in wildy higher borrowing levels, is because the banks nevertheless apply an affordability test which compares expected annual borrowing costs with annual income.

The borrowing though will assume a notional 4.5% interest + 1% minimum capital repayment. The fact that in practice you can currently secure a 15 year fixed 2% rate, is ignored.

Also, if you are over 45 you can expect them to look at pension arrangements and insist on a higher annual capital repayment now, to also ensure that the remaining loan can be serviced, once you reach retirement and typically have a lower income.

Finally, if you want to buy a house, rather than an apartment, you can expect them to include a 1% assumption for annual manintenance costs.

Hope it helps

Phillip

Those are some great points from Philip above.

The tax advantage is the main point to not having a fixed term. The banks help you stay balanced with your income vs tax vs real estate interest, so that you can pay less tax but avoid paying large sums off the mortgage principal.

At first it seems like you will never own the place freehold, however the money that you would otherwise spend on direct amortisation is saved in other accounts, like third pillar A, B and C so that it grows at a much higher interest rate, than a regular savings account.

Finally, the real estate market here is a sure gain - Geneva has a high demand, low availability market and the right location can only be a long term advantage.

Cheers,

You should look around very carefully. Check market prices as there is much speculation in the market. As a general rule I offer 20 to 33% below asking prices for clients who I have helped buy houses or apartments. It doesn't mean you will always get the place, but you will often be much closer to the real value than the asking price. Also check out any realtor you use and get any representations they make to you in writing. If they won't put it in writing walk away as they are likely bring or going to be dishonest. About half the realtors I have dealt with in Geneva have acted dishonestly at some point in a negotiation. Bankers are not immune either. Check carefully the mortgage rate your bank offers (generally I have found Libor linked rates to be best, but shop around) and what benefits they will give you (free credit card, one year discounted rate, nothing is impossible if they want your business). PostFinance (even though don't offer many special perks) is usually good and Credit Agricole has often offered best rates. 

Yes many people carry mortgages their whole lives or at least until they sell their homes.

At a political level it is a little like Swiss welfare for banks. You coukd never payoff your mortgage,  but you pay interest all your life. Even billionaires don't have incentives to buy property outright but take out mortgages. The interest is a tax deduction, so they get an advantage, but in my view the biggest advantage acrues to banks that get interest payments. If you buy a property outright you are taxed at its full value. That means if you have 100,000 chf annual income, and you buy a 2,000,000 chf house your tax burden will be virtually as if you had an income of more than 2 million chf. It's a bit more nuanced than this, but this is generally how the Swiss force property owners to keep Swiss banks on welfare. And the Swiss banks repay you by negative interest rates (yes, you pay some of them to hold your money) and some the highest bank charges in the world.

And finally, be very wary of people who tell you the real-estate market in Geneva is a sure win. I know people who lost nearly everything in the 1990s and some who lost much on property recently. The Geneva property market is full of speculation. Rents a more reasonable today and a much safer bet if you are only staying in Geneva for a year or up to four years. If you do buy to live in Geneva longer, then follow some advice above that Philip and others make. If you property in Geneva you could lose big, if you can't hold it and wait for a buyer.

Even if you have a life time mortgage, note that the bank will almost always make you pay the capital down, sometime significantly, if your income decreases with your pension, as it does for most people. If you have not planned for this it could cause you trouble and if you planned on you bank to invest your money to ensure you could pay your mortgage down you may be in for a rude surprise based on how some major Swiss banks have invested their clients' money.

 "the real estate market here is a sure gain"

Ouch.

Yes, and no problem in saying it.

You seem to advocate it yourself as someone who is "curious and hungry for everything that makes life such an insane festival for the brave."

Given the current state of the market, would it be wise to wait 1-2 years before buying, or not?

Some say that the prices are going down.  However, waiting too much might mean you won't be able to buy anywhere -- not even in France.  Compared to 8 years ago, real estate prices are more than double today, while the cost of living went up by 30% and salaries went down of the same amount.  It looks like the real estate market is always going to go up. 

Hello 

Begore buying any propety you must search in market about the current status of the price. Also, make sure that you go to the refered broker who can in actually help you. Becasue there are many consultants who are fake. So, before buying make sure that you take care of these things so that you doesn't face any issues later on.

Reference

http://ppgi.com/

https://www.google.com/maps/d/u/0/viewer?mid=z-djuN2quPqQ.k9TQUCI2ps8E

Hello 

Begore buying any propety you must search in market about the current status of the price. Also, make sure that you go to the refered broker who can in actually help you. Becasue there are many consultants who are fake. So, before buying make sure that you take care of these things so that you doesn't face any issues later on.

Reference

http://ppgi.com/

https://www.google.com/maps/d/u/0/viewer?mid=z-djuN2quPqQ.k9TQUCI2ps8E