Access of foreign investors to Swiss real estate market

[gaijin]

According to a report in NZZ and many other media, le conseil national is planning to limit access of foreign investors to the Swiss real estate market. This could have consequences down to retail investors.
Currently, many Swiss real estate companies can be traded freely at SIX. If access to such companies is restricted SIX would have to check before each purchase if the buyer is Swiss or foreign. This would severely limit trading and force these companies to delist from SIX. This would bring down the value of these companies. Also investing in these companies would become more difficulty, resulting in a loss of diversification for Swiss investors and the Swiss population as a whole (through their 2nd pillar).
Of course, this is probably a worst case scenario. Still, it seems that the potential benefits (more housing) cannot be reached by this measure and is far outweighed by the drawbacks.

 

[ach]

According to a report in NZZ and many other media, le conseil national is planning to limit access of foreign investors to the Swiss real estate market. This could have consequences down to retail investors.
Currently, many Swiss real estate companies can be traded freely at SIX. If access to such companies is restricted SIX would have to check before each purchase if the buyer is Swiss or foreign. This would severely limit trading and force these companies to delist from SIX. This would bring down the value of these companies. Also investing in these companies would become more difficulty, resulting in a loss of diversification for Swiss investors and the Swiss population as a whole (through their 2nd pillar).
Of course, this is probably a worst case scenario. Still, it seems that the potential benefits (more housing) cannot be reached by this measure and is far outweighed by the drawbacks.

I completely agree with you, a whole lot of problems for nothing in return. Unfortunately this was sold as the solution to counter the 10 millions initiative and now they all feel compelled to implement this.

On the other side I don't feel like delistings will happen, after all brokers know their clients residence, so it should be quite easy to allow or deny access to these products. Somewhere I read that the non-residents ownership of the real estate funds was negligible (3-5%?), but I can't find anymore where I read it, sorry

 

[gaijin]

On the other side I don't feel like delistings will happen, after all brokers know their clients residence, so it should be quite easy to allow or deny access to these products.

You're right, I didn't think of that. The NZZ articles only quotes SIX. But of course this it brokers' daily business to enable or disable access to trading products based on the residency of their clients (i.e. no access to VT for EU residents).

Somewhere I read that the non-residents ownership of the real estate funds was negligible (3-5%?), but I can't find anymore where I read it, sorry

The NZZ article mentions 7.8%. This is the number of shares of the real estate company Mobimo which are held by foreigners.

 

[ach]

You're right, I didn't think of that. The NZZ articles only quotes SIX. But of course this it brokers' daily business to enable or disable access to trading products based on the residency of their clients (i.e. no access to VT for EU residents).



The NZZ article mentions 7.8%. This is the number of shares of the real estate company Mobimo which are held by foreigners.

I would also imagine that existing shareholders would be allowed to stay, but no new purchases will be allowed. This would slow down any withdrawals.

 

[Baptiste Wicht]

It may make the investments less interesting since there is less demand, but I would say that less speculation on Swiss real estate is a good thing, given the rising prices.