Expats Swap Plush Rentals for Mountain Retreats

Expats Swap Plush Rentals for Mountain Retreats

1 Expats Swap Plush Rentals for Mountain Retreats
Newsletter 3/12, December 2012
The picture of a wealthy expat couple sipping a gin and
tonic by their swimming pool, with a housekeeper
waiting on them whilst a nanny looks after their
children is fast becoming extinct. In the last three
years since the onset of the global economic crisis,
things have changed drastically and the first place
expats are looking to save money is on their rental
living costs. Hence they are more likely to live
modestly in the main (rented) family home in the city,
and indulge in buying a mountain holiday retreat. This
has the added incentive that it is generally a good
capital investment, and affordable at the current low
interest rates. The effect on the high-end rental
market in both Zurich and Zug, has been dramatic.
One of the main reasons for this change is the type
of expat assignments that are currently being
exercised by HR in the formulation of their relocation
policies. Long-term assignments are being increasingly
replaced by short-term assignments or “localisation”.
Transferees are no longer guaranteed to have their
living expenses met, but are expected to pay for living
costs and schooling expenses out of their own
pockets. Lump sum relocation package compensation is
now common place, although this does have its
drawbacks. On the whole, benefits have been cut back
significantly and slowly the effect of this local
contract assignee has already had an effect on the
local housing market.
In general, properties renting for CHF 10’000 or more
are staying on the market for longer, sometimes for as
long as six months. Properties in the higher price range
with what some people may say are exaggerated rents
for between 14-18’000 or even properties for 25’000
with a swimming pool, mature garden, private lake jetty
and other special features are proving difficult to
rent at all.
Expats, of course, are the main target group for the
upper-end rental market and will remain so. But
everyone is asking – we still have expats here, so what
has gone wrong? The change has occurred within the
administration of corporate relocation policies and is
a direct consequence of the global recession and
people behaving modestly.
www.primerelocation.ch 2 Most expats’ budgets for a decent size family house
waiver around the CHF 5-6’000 mark. At this price, it is
possible to get a decent house or apartment with four
bedrooms. Singles look to spend anything between
CHF1500 and 4000, depending on salary and housing
expectations.
buying a house with a view to saving substantially on
living costs or as an investment. This trend is set to
increase in the future, not decrease and this will
further impede the difficulties associated with renting
luxury properties, as people will remain cost conscious
for a while.
In our experience, most expats on an assignment away
from home are looking to find a home to fulfil their
dream of life in Switzerland – the Swiss dream! There
are many factors important in determining that dream
– cosiness, special features like fireplace, modern
kitchen, alp view, outside space/garden or mere
quality. Let’s face it, housing is important.
Transferees also want to get the best money can buy
and at the same time, budget and costs are a
determining factor.
The current trend is for expats to invest their
savings into holiday homes like mountain apartments or
chalets. This provides expats with the opportunity of
getting away from it all, enjoying the Swiss alps to the
full and is a great asset for skiing, hiking and for
sharing time with family and friends. Buying property in
a mountain location is also considerably cheaper than
in the city and this is a clear attraction.
Part of our role as relocation consultants is to advise
clients on whether the price offered is fair and
negotiate where possible. Our expertise in the real
estate market comes into play if we find a property
overpriced or unreasonable. In this case, it either
doesn’t find its way onto our shortlist, thus ensuring
the assignee gets good value for money and a fair deal
or we negotiate upfront.
Very expensive locations or properties are difficult
to rent, even on the Zürich gold coast or in Canton
Zug. With the current all-time low mortgage interest
rates (between 2-3%) and the ready availability of a
permit B, many expats also quickly consider either
Maybe the initial picture of expats sipping a gin and
tonic by the swimming pool should be replaced with a
couple in a mountain chalet enjoying a Glühwein after a
day’s skiing – this is the real Swiss expat dream! Of
course living cheaper and saving pennies is on
everyone’s mind in this economic climate, but expats
also still want to live that dream and if they don’t find
it in the city, then they soon look to the mountains to
ascertain a part of Switzerland to truly call “home”.
Lump sum relocation policies and localisation looks set
to increase in the future, no matter what happens to
the economy or housing market. The opportunity of
living in Switzerland is a benefit in itself after all and
the wonderful quality of life here means that anyone
will gladly swap a gin and tonic for a glühwein any day.
Newsletter Prime Relocation Dec/12