The third most populated canton in Switzerland presents a property market supported by strong demand and a solid economy. But there are significant differences between its various regions.
The economic indicators are green for the canton of Vaud and its 780 000 inhabitants. After a slight slowdown in 2017, an acceleration of Vaudois growth is effectively taking shape in 2018 : the Vaud Statistics department announced +2,4% thanks to an improvement in the global economy and a weaker franc, in particular against the euro. If last year the canton’s GDP growth was limited to 0,8% thanks to the weakness of the first half of the year, for this year the GDP should increase by 2,0%. Like the Swiss economy as a whole, the canton seems poised to recover from the shock of the abandonment of the cap on the Swiss franc value against the euro in January 2015. The main
beneficiaries of this upturn are the financial services and property and construction activities, which, according to Vaud Statistics, should see their activity “grow at a marked pace in 2018 !”
The growth of micro-markets
In the last decade, the canton has generally been more dynamic than the Swiss average, even if the Confederation is one of the most prosperous economies in the world. A trend that has no reason to reverse in the future, the Vaud economy appears balanced thanks to its diversification into the services and tertiary sector. This economic attractiveness naturally entails a steady growth in property prices. Because, to attract buyers, the canton of Vaud has a multitude of specific advantages (first-rate infrastructures, international airport nearby, attractive taxation, highly skilled and cosmopolitan workforce, world-class schools and universities and a rich and varied economic fabric…) making it one of the drivers of the Swiss property market. The market is therefore in a period of sustained growth, with continued high demand, which implies high prices per m2, it would be difficult to find an apartment for less than CHF 6’000.-/m2, knowing that the most quoted sectors exceed the CHF 12’000.-/m2 bar, or even more for some prestigious properties.
On the other hand, it seems particularly risky to quote a valid average price range throughout the canton, as micro-markets with marked specificities are multiplied. Certainly, the property situation in Vaud is not very uniform, the Riviera and west Lausanne generally being twice as expensive as the central canton, south of Lake Neuchâtel. However, on the sectors bordering Lake Geneva, it is possible to have an average price range, with houses hovering at around CHF 7’000.-/m2, while apartments break the CHF 8’000.- m2 mark (*). The Vaud ski resorts, such as Les Diablerets or Rougemont, by nature form a separate market. The supply of chalets and high-end residences respond to the bespoke market, taking into account the aspect and location to within a few meters.
Three and four-room apartments are the most sought after
How will this coveted market evolve in the next 20 years? According to Vaud Statistics, “more than half of the homes sought by 2040 would comprise three and four rooms (56%)”. This trend can be explained both by the expected high growth of one-and two-person households (now mostly housed in three-or four-room dwellings) and the growing willingness of families with children to live in this category of housing.
Compared to the last fifteen years, the demand for one-room apartments would be halved by 2030, while the demand for four-room apartments would be reduced by 30% and 35% respectively. A trend that investors are scrutinising, especially as in the highly sought after sectors of Western Lausanne and Vevey, the demand for large apartments (5-room and more) is reportedly dropping, to represent only 20 % of the demand.