Buy property in the Zurich, Switzerland area?

[Tom Fritz]

Dear all,

Feeling blessed and very happy to have found this great community. I am based in Zurich, Switzerland and work in the financial industry. I have been investing in real estate for a couple of years and currently own a multifamily property in Austria which is rented out and has been a good investment. In Zurich where I am living, property prices have been skyrocketing since years and it seems like that the property market is immune to any economic changes and crises (such as the pandemic, rising interest rates etc.). This is primarily due to the fact that Zurich is one of Europe's most important economic hot spots combined with a very high per capita income that has led to tremendous population growth since the early 2000's. Just as an example, prices for a standard apartment in a middle-tier area and around 20-30 minutes away from the city center start at around 13k-15k USD per square meter (1 square meter is around 10.7 square feet) . For investors, rental yields are unattractive (around 2%). However, the two factors that make ownership of property (and at the same time living in it) attractive are to benefit from tax advantages when using mortgage financing and to benefit from the continuous price appreciation.

I have been of two minds for a long time if I shall purchase property in Zurich (and allocate all my equity) for myself and benefit from the aforementioned advantages or consider to invest in property
in a lower price area in Switzerland where prices tend to be 30-50% lower than in Zurich (although around 1 - 1.5 hours away from Zurich which would mean that I would have to work partially from home which would be possible) Alternatively, I have considered investing in attractively priced property in a foreign jurisdiction such as Portugal, benefit from the much higher rental yields and continue to rent an apartment in Zurich.

I would greatly appreciate your thoughts regarding my question and thank you in advance.

All the best,

Thomas

[Tom Fritz]

Hi Mike,

Greatly appreciate your thoughts, very helpful.

Best,

Tom