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How a cross-border train has pushed house prices up in Switzerland and France

A commuter rail link between Switzerland and France has caused property prices on both sides of the border to rise sharply.

How a cross-border train has pushed house prices up in Switzerland and France
Private universities market their location near international institutions to attract students to Geneva. (Image by 495756 from Pixabay)

When the Léman Express (LEX) was inaugurated in December 2019, its main goal was to connect the Geneva region with neighbouring French towns and provide a quicker commute for cross-border workers.

Established by the Swiss (SBB) and French (SNCF) railway companies, LEX is Europe’s largest cross-border regional rail network.

Some of the approximately 92,000 employees from France commute to their jobs in the Lake Geneva region by car, while others prefer to take Léman Express, which was launched specifically to reduce journey times and cut traffic in and around Geneva.

But while this goal has been largely achieved – the train carries 52,000 passengers a day — the rail link is also causing rents and property prices in the vicinity of the train’s 45 stations to soar by 8 to 9 percent on average — a sharper increase than elsewhere in the region.  

Prices rose in the French departments of Haute-Savoie and Ain, as well as in Swiss cantons of Geneva and Vaud, all of which lie along Léman Express’ 230-km track, according to Tribune de Genève (TDG).

Screenshot Léman Express

Why has this happened ?

As a general rule, transport infrastructure influences real estate prices, according to Dragana Djurdjevic, statistician at Wüest Partner real estate consultants interviewed by TDG.

Increases vary based on the type of transport —such as trains, buses or trams — as well as the frequency and the distance of the property to the nearest stop.

Typically, prices / rents are the highest within 300 metres around a station.

In general, Swiss and French municipalities with a LEX station have recorded significantly higher rents and sale prices than areas that have no access to the train, Djurdjevic said.

Just how much have prices increased along the LEX line?

On  the Swiss side, rents rose by 4.9 percent along the track.  In Geneva itself (already the most expensive rental market) , they went up by 1.5 percent, and only slightly less (1.4 percent) in Vaud.

READ MORE: Why is Geneva’s rent the highest in Switzerland?

In terms of properties, prices along the network rose by 17.7 percent; in Geneva the increase is 12.3 percent, and 13 percent in Vaud.

In neighbouring France, rents increased by 6.1 percent along LEX stops. In Haute-Savoie, the increase is 6.3 percent and in Ain 9.1 percent.

Sale prices went up by 15.7 percent along the track, 14.8 percent in Haute-Savoie and 23.7 percent in Ain.

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Property prices in Switzerland set to become (slightly) more affordable

Home ownership in Switzerland is out of reach for most people, but there are changes afoot — at least in some regions - that could make it possible for more people to buy.

Property prices in Switzerland set to become (slightly) more affordable

At times, being a property owner in Switzerland is cheaper than renting, and at other times it is the opposite.

For instance, if mortgage interest rates are low and rents high, then buying a home makes better financial sense than being a tenant.

What is the current situation?

In the first three months of 2024, home owners have had a heavier financial burden than tenants of similar properties, according to a UBS study.

It shows that the annual cost for an owned apartment of four and a half rooms and 110 square metres of living space was 32,500 francs a year between January and end of March, while the annual rent for for a similar size flat amounted to 30,500 francs.

That is especially the case for owners who took out a long-term fixed mortgage when rates were at their highest, that is, well over 2 percent. 

For instance, a person who took out a long-term mortgage during this period would have to bear cumulative additional costs of almost 50,000 francs by 2033.

What lies ahead in terms of property prices?

Better news for prospective property owners.

Thanks to falling mortgage interest rates — due mostly to two key rate cuts still expected from the Swiss National Bank (SNB) — mortgages are now significantly lower than they were at this time in 2023.

Many are now below 2 percent and they are expected to drop further by the beginning of 2025, according to UBS’s forecast.

This is already the case in cantons of Bern, Solothurn, Aargau, Schaffhausen and Thurgau, as well as in certain areas of Vaud, Fribourg and Valais, where buying a home is also already cheaper than renting.

On the other hand, mountain regions will continue to be more expensive than most other parts of the country.

READ ALSO: Why luxury Swiss mountain resorts are becoming ‘lifeless’