Zurich vs. Geneva: Compared
1. Housing Price Index
Over the past decade, Switzerland’s residential house price index has witnessed a remarkable growth of 34.2% – and both Zurich and Geneva have ridden this wave. In fact, Zurich saw a staggering growth of 50.5% in its housing prices during the last 10 years, surpassing the country’s average.
On the other hand, real estate prices in Geneva rose at a significantly lower pace, with an increase of 24.6% over the same period. This seems to place Zurich ahead of Geneva in terms of housing price appreciation, positioning it as a promising hub for further real estate growth and creating an enticing prospect for potential investors. That said, before we draw our final conclusions, let’s take a closer look at some underlying factors.
Housing price index growth in Switzerland, Zurich, and Geneva over the past 10 years
2. High demand, low supply
In the fourth quarter of 2022, Switzerland’s housing supply was clinging close to all-time lows, with vacancy rates of only 1.6% for condominiums and 1.5% for single-family homes. While Zurich mirrors this challenge with an even lower vacancy rate, hovering around 0.5%, the shores of Lake Geneva stand out as an exception, boasting comparatively higher supply rates exceeding 2% in a select few municipalities.
Housing supply rate for Switzerland, Zurich, and Geneva
Source: Credit Suisse
Despite a slight setback in demand at the end of 2022 and into 2023, we perceive this as a short-term phenomenon likely to rectify itself in 2024 due to an anticipated rise in tourist flows and an increase in immigration.
Besides being an economic powerhouse and global business and financial hub, Switzerland is known worldwide for its picturesque landscapes, making it a hotspot for tourism. In 2022, Switzerland counted a total of 38.2 million overnight stays, marking an increase of 29.4% compared to 2021 and only a 3.3% decrease compared to pre-pandemic levels. Zurich, with its 5.4 million overnight stays, and Geneva, with almost 3 million stays, both played integral roles in this tourism surge.
Overnight stays in Switzerland
Source: Federal Statistical Office
Despite fluctuations during the pandemic, both Zurich and Geneva showed an outstanding resilience and are on the verge of returning to pre-pandemic levels, with the former comprising 5.96 million overnight stays in 2019 and the latter 3.2 million.
The pace of growth in overnight stays in both cities seems to project not only a tourism revival in 2023 but potentially also an all-time record, setting new highs beyond pre-pandemic figures.
4. Academic influx
Another often neglected and perhaps surprising driver of housing demand in Switzerland is the influx of international students. Switzerland is home to some of the best universities in the world including, but not limited to, ETH Zurich, the Swiss Federal Institute of Technology in Lausanne, and the University of Geneva. This has led to notable academic interest, reflected in a steady rise in international student numbers – with approximately 74’440 students living and studying in Switzerland in 2022.
The increasing number of national and international students in Switzerland could lead to interesting opportunities for real estate investors. According to data from JLL, an astonishing EUR 11.6 billion has been deployed across the EMEA region for purpose-built student accommodation. As a consequence, should this trend persist, Zurich and Geneva are poised to experience heightened demand, most likely resulting in higher prices for real estate.
5. Quality of Life
When deciding on a real estate investment location, assessing the overall quality of life is paramount – and Switzerland undoubtedly stands out as a top choice in this regard.
In fact, according to the 2023 Global Liveability Index, Zurich ranks 6th globally, excelling in stability, healthcare, culture & environment, education, and infrastructure. Similarly, Geneva closely follows, sharing the 7th spot with Calgary, Canada.
Top 10 positions within the Global Liveability Index 2023
Source: The Economist Intelligence Unit
Unlike tourists and international students who usually only aim to stay somewhere for a limited period of time, people contemplating a more extended stay prioritize a location’s quality of life as a factor that strongly influences their decision to settle long-term. Cities like Zurich and Geneva are therefore likely to continue attracting new residents, thereby increasing the demand for long-term and permanent housing alternatives.