Overheating in Geneva : the price of the land explodes

Real estate is overheated in Geneva. Property prices by floors and villas fly. In areas with no building constructed, rising nearly 100% in four years! Not to mention the rental units, which were not included in the study of the Cantonal Office of Statistics (OCSTAT), published last week. These awards illustrate the crisis of supply in a sclerotic market, characterized by the scarcity of land and inadequate buildings.

Thus, any villa, say Veyrier or Oak Bougeries, sells for 1.4 million francs in 2008 when it was trading for just one million four years earlier. If the house has a bit of cachet, such as old, he will pay an average of over one million. An increase of 50% in the same interval. The apartments in the condominium following the trend.

As for the undeveloped land, inflation is more impressive. In villas area, price per square foot has jumped from 710 francs from 2005 to 1368 francs last year (see graphic below-cons). "The price of construction remaining fairly stable, it is logical that the price of land flies cope with demand so strong", according to Professor Martin Hoesli, University of Geneva. However, the economist pursues a share of this increase may be due to a difference in quality between the objects in question: the 2005 study included more villas located in Vernier that during the last survey, where many goods sold from of wealthier municipalities. But this qualitative factor plays a minor role compared to the imbalance between supply and demand.

Even if the building sites were not abundant in the short term, all prospective studies rely on a cheaper houses due to the crisis. Credit Suisse explained this fact by a sharp overvaluation of assets on the economic growth of recent years.

Nothing comparable in the early 90s, but over the last twelve years, rising house prices was 67.5% higher than revenues. Such a mismatch necessarily requires a correction. Also, the slowdown should reduce the average quality items at prices closer to their real value. This phenomenon is not yet supported by statistics.

Another sign of excess ambient observed in the 2008 accounts of the township. While the number of sales has been declining during the past five years, revenue from tax on property gains have tripled. Referring to this figure, State Councilor David Hiler had then reported overheating.

It is also the term used by Christopher Aumeunier, secretary general of the Geneva Chamber estate. But he rejects any idea of speculation: "This term has a temporal concept, provisional. But the problem is structural in Geneva. Moreover, there is a decrease in transactions, which may not be the case during periods of speculation. "