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Tags: BNS, France, Geneva, Germany, housing, immigration workers, Italy, lake leman, lifetime employment, Montreux, prices, property owners, region, resident foreigners, rices in property prices and rent, rising, Romandie, Salaries, Schwytz, seeking jobs, switzerland, trend, urban centers, wave of immigration, Zug

Rising Immigration Causes Rents to Rise in Geneva

Posted on 13 December 2009 by Sprecher

geneva_housingHousing prices across the entire lake leman region, from Geneva to Montreux, are rising eith the influx of foreigners seeking work in the Romandie area. Higher unemployment in neighboring France, Italy, and Germany have resulted in substantial increases immigration of workers seeking jobs in Switzerland. The National Bank of Switzerland (BNS) recently published a study of the trend, linking the wave of immigration to rising property prices and rents. The BNS is one of many government organs or agencies whose federal workers have lifetime employment with indexed salaries.

According to a report by Wuest & Partner, over the past 3 years, rents have risen by more than 10% in Geneva, Lausanne and Zurich. Across all of Switzerland renters appear to have been the most penalized by the trend of rising property prices. In Switzerland only one third of households are property owners.

Geneva, Lausanne, Vevey, Aigle, Zurich and Lugano are among the 10 regions with the strongest rise in the number of resident foreigners. According to the OFS (the federal bureau of statistics) the trend has accentuated steadily over the past 4 years, with 2008 the year with the largest wave of immigration since statistics were collected. The immigrants came mainly from neighboring European countries.

The BNS however refrained from venturing a precise quantitative relation between the flux of new immigrant workers and the extent of the rise in rents. Rather, they limited their conclusions to anodyne observations on the ineluctable relationship between supply and demand.

The Europeans who have moved to Switzerland over the past several years have occasionally chosen to purchase their lodgings, in which case their purchases have influenced the rising prices of small multifamily houses or villas or apartments.

A percentage of the new immigrants do not seek residence in the urban centers but rather in small tax shelter cantons like Schwytz or Zug. There has been a substantial rise in the already high property prices in Zug resulting from the phenomenon of European immigrants seeking fiscally advantageous domiciles. It has forced a substantial number of indigenous residents out of the town because of the rising prices.

According to the BAK in Basel, the property shortfall in the affected areas will result in a drop of roughly 20% in available properties for purchase or rent, causing further rises in property prices and rents.

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