Andermatt is a small mountain village in the Swiss Alps. It's a few hours from Zurich, it's known for its skiing and snowboarding, and it's surely really beautiful. But right now it has two other important things going for it: one, it does not restrict property purchases by foreign nationals and, two, it does not limit the construction of second homes to 20% of the village's housing stock, which is a rule in other places. This is expected to come into force in Andermatt in 2040.
Because of these features, Andermatt is being viewed as a barometer for foreign demand and, over the last six weeks in particular, local developers and agencies are reporting "hockey stick growth" in terms of sales volume and inquiries (according to FT). As of April 10, new development projects in the village reported selling SFr14.2mn worth of apartments, which is nearly 2x the amount of transactions for all of 2024. And nearly a third of these deals were signed by "nervous Americans" following April 2.
Here's one buyer testimonial:
One Andermatt buyer, a New York-based tech entrepreneur in his early fifties who asked to remain anonymous, said Trump was one of the “main factors” in his decision to buy. He and his partner purchased a two-bedroom unit for SFr2.2mn in November. Switzerland, he said, was stable and secure at a time when the US was less so under Trump. “It is not only financial uncertainty — it is not liking what [the US] is turning into and what it has become,” he said.
It is not uncommon for people to say, "if X happens, then I'm going to leave and move to Y." That doesn't always, or even oftentimes, materialize. But wealthy people have the means to make it happen, if they want, and we're seeing signs of it all across Europe. In some cases, putting down a deposit on a new Swiss apartment might just be an option, should things get worse. And in other cases it may be a firm commitment to relocate.
But either way, it's a strong indicator and a demonstration of people voting with their feet.
I was reading through PwC and ULI’s 2016 Emerging Trends in Real Estate report this evening and a handful of charts stood out to me. They’re not all related to each other, which is why this blog post is called what it is. But I think you’ll find them relevant to many of the things we talk about on this blog.
1. Average home size by country
With all the interest today in “small urban spaces” it’s interesting to see that the average home size for half the countries on this list is somewhere between 500 and ~1100 sf. It’s also amazing to see Hong Kong hovering just below 500 sf.
2) The decline in homeownership in the US
I like to follow home ownership rates because there’s a lot of debate around whether or not this obsession with homeownership – which has been so central to the ethos of countries like the US and Canada – is at all falling out of a favor. This chart shows some pretty significant drops from previous highs.
3) Average home prices and the price to income ratio in major Canadian cities
Not surprisingly, Vancouver and Toronto are the top of this list with the highest average home prices and the highest price to income ratios (i.e. the worst affordability).
4) Drivers as a percentage of all commuters in the US
This chart is similar to what you would see if you looked at vehicle miles traveled. I’ve heard some people say that driving is now once again on the rise, but for the past decade and a half it’s been on a slow and steady decline.
5) Countries buying US real estate
Canada is a big buyer of US real estate. But with the dollar where it is today, I am sure that number is headed downwards.
