The euro shock and the real estate market
Since the Swiss National Bank removed the minimum exchange rate for the euro in mid-January, the discussion about the currency situation has found no end. This topic is obviously also an issue of concern for Andermatt Swiss Alps AG. Christof Birkhofer, Head of Real Estate, says: “Removal of the minimum exchange rate had no effect on the majority of our customers because they calculate in Swiss francs or a third currency. Only one in five of our customers comes from the euro zone – and among them the shock was short-lived. Investing in real estate still remains a safe investment, one in which exchange rate risks are not so high.” Nevertheless, Andermatt Swiss Alps AG responded to the situation immediately: “We sat down with the banks to secure the highest possible financing ratios. In concrete terms, this means that a buyer can go to a local bank and get a mortgage in Swiss francs for up to 60 % of the purchase price of his or her Andermatt property – even when the property is a second home and the buyer’s primary residence is outside of Switzerland.” Thus, the impact of cancelling the minimum exchange rate for the euro remains relatively low. “If we assume that only 40 % of the total amount is subject to exchange rate risks, then the difference from the previous situation is only 5 % to 6 %. And of course we take into account the situation of each individual customer.”
Diversification of financing is a possibility. Also, there is the additional option of generating rental income once the property is finished. Rental income and interest are registered in Swiss francs. “This can further enhance one’s estate, if you wish to call it that.” Christof Birkhofer is convinced that an investment in real estate definitely pays off: “Especially if you want to invest your money wisely for the long term, it’s worth it to buy property. In the face of potential inflation, this is a profitable investment.”
Nevertheless, a certain amount of restraint is currently to be seen among people in the euro zone. But Christof Birkhofer simultaneously observes a new trend: “Of course, the exchange rate shock still lingers on a bit for us all. But on the other hand, domestic demand has risen – thanks to the attractive interest rates.”
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