Buying a house in Bern: Real estate in Bern is in high demand
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"Real estate in Bern and Thun often goes to the highest bidder"

The demand for residential property is high in the city of Bern and the surrounding area, says Nadja Müller, Head of Credit Suisse's mortgage center for southeastern Bern. In this interview, she gives tips for buying property in Bern. 

What is the market situation like for real estate in Bern?

Nadja Müller:* Measured by demand, there is not enough residential property being built in the city and the surrounding area of Bern. Single building projects in attractive locations are sold within a very short time. Although real estate in the canton of Bern is generally sold at a fair price, the market price is rising again. An exception is the city of Bern, where real estate is already often sold to the highest bidder above market value. The same picture is emerging in Thun. 

planned-real estate-region-bern

Planned real estate in the Bern region 

Construction measured by the number of dwellings approved in the last 12 months.

Source: Baublatt, Credit Suisse

Why in Thun?

Demand is very high. Many people in Thun want to buy their own property. In addition, people from the surrounding region want to live in Thun and buy real estate there. But there is not enough to go around. Houses and apartments that go on the market are sometimes sold within a few days – even in the higher price segment. Why is that? Thun is a beautiful city in the Bernese Oberland. Residents there have Lake Thun, the Aare river, and the mountains right at their doorstep. They live in the local recreation area, but thanks to a direct rail connection, they're just a short trip away from Bern or Valais. 

Would you say that real estate in Bern is overvalued?

No. Bern's real estate market is not overheated. However, a number of buyers are looking in places where there is just not a good offering.

Given the limited supply, where do buyers find real estate in Bern?

Practically everything today is done with online portals. Financing experts can offer crucial support during the search. They are familiar with the market and know sellers of real estate in the region. Oftentimes, they also know about projects in planning. 

In the city of Bern, some apartments as well as houses fall under a ground lease.

Nadja Müller, Head of Credit Suisse's mortgage center for southeastern Bern

What can interested parties do themselves if they want to buy a house in the federal city?

They should talk to sellers of real estate and let them know what they are looking for and where they are looking. Some real estate companies operate an internal portal that lists who is looking for what. As soon as a suitable property is for sale, they inform the interested parties – sometimes even days before they officially announce the property. Good property is also often sold on the quiet. For this reason, it is worth telling friends and family about your intentions to make a purchase. 

What should I keep in mind if I buy an apartment in Bern?

In the city of Bern, some apartments as well as houses fall under a ground lease. This means people buy the property, but not the land. So, the real estate owner pays ground rent for the site under their property. The city of Bern has the highest density of such leasehold properties in all of Switzerland. 

What does that mean for the buyer?

It is key that they read every detail of the building rights agreement. What are the conditions? How much is the interest each year? How long is the ground lease valid and what happens when it expires? Buyers must be familiar with the consequences of a ground lease. 

What other regional characteristics apply to real estate in the canton of Bern?

Location is very important. You can see that in the resale price. We are noticing that access to public transportation has gained in importance. People want shorter ways to or from work, and they want to sit in traffic less. That is why there is high demand for real estate in the city of Bern and the surrounding area. But at the same time, people do not want to live on busy streets or train lines.

Taxes in Bern are particularly high. Does this influence real estate prices?

Absolutely. The municipal tax rate can vary greatly. It pays to look at the muncipality's rate. For example, Muri has a low municipal tax; as such, real estate there is more expensive. Prices in Muri have increased considerably over the last 10 years.

Renovated farmhouses are highly sought-after properties. Investments are usually above the market value.

Nadja Müller, Head of Credit Suisse's mortgage center for southeastern Bern

The situation in the mountains is certainly also unique. What do I have to know if I want to buy a chalet in the Bernese Oberland?

It highly depends on where the chalet is located. Ski areas, such as Lenk, Adelboden, or Schönried, are seeing high demand for chalets or vacation properties. Even its location in town impacts the purchase price. It is important to check the condition of the property and whether the chalet is in a danger zone. Flooding, landslides, or avalanches are becoming more and more problematic. 

Has the Swiss Second Homes Act impacted the purchase price of chalets?

First or second homes are a hot topic in vacation regions. In many places, second homes may no longer be built. If a chalet can be used as a second home, it makes a positive impact on the value in the medium-term. But until recently, prices dropped because too many second homes were built before the Second Home Act entered into force. 

There are also special provisions for farmhouses. Where do interested parties go to find a farmhouse to buy – for example, in Emmental?

The best way is through personal contacts. People also need to be patient. Before making a purchase, its condition should be assessed. It pays to look at the farmhouse with an architect. They can assess which structural measures are possible and necessary and what to expect in terms of renovation costs. In addition, you must clarify how the house can be used and what changes are permitted. Ultimately, renovated farmhouses are highly sought-after properties. The total investments are usually above the actual market value

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