Rare Swiss Alps property project available to foreign buyers sees rising demand from investors in Hong Kong, Asia

By Cheryl Arcibalcheryl.arcibal@scmp.com / https://www.scmp.com/business/article/3089114/rare-swiss-alps-property-project-available-foreign-buyers-sees-rising?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3089114 | June 23, 2020 2:41 PM SGT
The company behind the only development in the Swiss Alps that is available for foreign ownership said it expected demand from Hong Kong and other markets in Asia to grow following the coronavirus pandemic.
"We've actually seen a substantial increase in demand from foreign buyers, particularly those coming from Asia, owing to the Covid-19 crisis," said Russell Collins, head of sales at Swiss property company Andermatt Swiss Alps. "Evidently, prospective second-home owners and investors are seeing the benefit of having a Plan-B during turbulent socio-economic times.
"Demand from buyers in Hong Kong and across Asia has grown over recent years, with buyers from the region accounting for around 15 per cent of owners [of the residential development and hotel serviced flats]. This is set to grow further this year as we anticipate that at least 50 per cent of our new development, Frame, will be sold to buyers from this region."
Frame is a contemporary development of duplex studios and one-bedroom flats, one of two projects that will launch this month at Andermatt Swiss, the only large-scale development in Switzerland that is available for foreign ownership, after the company secured an exemption from a federal law that essentially makes it difficult for foreigners to buy property in the country.
Andermatt Swiss, located in the Ursern Valley, two hours' drive from Zurich as well as Milan, will eventually comprise six new four or five-star hotels, about 500 flats in 42 buildings and 28 chalets.
Andermatt Swiss is being positioned as a world-class ski area in the winter, and an 18-hole alpine golf course in the summer. Photo: Handout
Loft studios measuring about 30 square metres or 323 sq ft are available at a starting price of US$332,000, while chalets are available for at least US$5.35 million. In comparison, a smaller 170 sq ft flat at the T-Plus development in Tuen Mun in Hong Kong recently sold for HK$2.52 million (US$325,000).
About 90 per cent of completed projects within Andermatt Swiss have been sold, with more than half of the buyers living outside Switzerland. The development is also exempt from a maximum limit on holiday homes built within a municipality.
Besides buying property at the development as a second home, investors can also rent it out to generate year-round cash flow, with the company helping them generate rental income and management of tenants. Tourists are also likely to be a source of rental income for would-be owners. Andermatt Swiss is being positioned as a world-class ski area in the winter, and an 18-hole alpine golf course in the summer.
The development is well positioned to cater to a shift in real-estate investment flows, Collins said. "The new normal among high-net-worth and mid-market real-estate investors is likely to be centred around prudence and conservative investment choices that are deemed as being safe and offer returns over the long term," he said.
In some cases, foreign owners of property in Switzerland are able to secure residence subject to an agreement with the local government. "Whilst it is not commonplace, a number of our owners from Asia have now chosen Andermatt as home all year round," Collins said.
Normally, foreigners buying property in Switzerland are only able to stay in the country for up to 180 days a year, with a maximum stay of three months at a time, according to Jeremy Rollason, head of Savills Ski. They are also subject to various federal, cantonal and community taxes, which vary from canton to canton.
"However, one can typically expect to pay between 0.25 and 0.5 per cent of the property's value in annual taxes," Rollason said. "Swiss property is attractive to investors due to a number of reasons, including the low cost of stamp duty, very low borrowing rates and relative government and financial stability. Switzerland also provides for a great lifestyle, premium quality of living and also there is zero inheritance tax paid on residential property."
"I like the project because it has a master plan, and [the project] is very attractive to tourists, especially those who love winter sports," said Hong Li, who is eyeing two lofts at Andermatt Swiss that she plans to combine into a bigger unit. A mainland Chinese investor, who is married to a Swiss national, and has businesses in Hong Kong and China, Li is currently based in Lausanne. She owns property in China, Vietnam and the United States, and said the project will eventually attract visitors and will prove to be a good investment.
"I believe that when the coronavirus pandemic is over, tourists will come," she said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.