Hi everyone,
I read it in the forum somewhere that there is some special type of apartments/houses (from what I understood, at a lower than market price) that you can buy but you can’t sell for 10 years.
What’s that called?
Is it available in every canton/city or just in particular cities?
Thanks!
Good evening, I do believe you’re talking about the apartment sold in ‘‘Zone de Développement’’ sorry I don’t know if there is an English name for those. The price is fixed by the Canton for example in Geneva and usually lower than the market price. You can sell it afterward, but I do believe during a 10 years period you can only sell it to the paid price plus the notary fees and extra options you have paid for during construction. Also you can’t rent it during the 10 years period. Most of them are pretty hard to get as there is a lot of people who wants to buy them and usually you need to be very quick as putting your name on the waiting list…or if you know someone well placed in the industry. Believe me there is a lot of bride to get one!
I understood that was specific to canton Geneva.
As Caribou alludes, everyone has an interest in buying a flat with market value 1M CHF or more for 600k. It is a crazy scheme and source of intransparency and corruption from what I have seen.
You will increase your chance if you know someone that will promote them and get the info before it will get published.
Some of my friend got one by having a day off to be sure to submit all papers asap.
Ah, it’s only for canton Geneva?
Thank you for the clarification all (@Barto @Caribou @FunnyDjo).
I have family that both work in and own construction companies so I wanted to know what is the name and rules before asking them about it.
I will report back.
Thank you!
As it has been said by fellow mustachians it’s nearly impossible to get one.
Besides only 50% of the appartment offer that will be built are actually put on the market.
The other half is usually booked before by the constructor (buying for his children, friends… etc) and by the financing bankers (I personally know someone who got his very underpriced flat in Carouge because his employer, a very famous Geneva’s private bank was lending money for the project).
There are some scandals here in Geneva’s canton which made headlines: Genève: Lutte contre la spéculation des PPE - 20 minutes
Edit : The authorities call this type of property ZD PPE (in french) and are listed here Opérations immobilières ZD PPE | ge.ch
This is insane sh*t on par with the level of eastern European corruption. Socialism is coming back from the west.
Hello everyone,
Does anyone bought a PPE appartment and would have recommendations on what should be done to maximize the chance to get one?
Thank you
Hello, I’m starting this topic again because I’ve recently become interested in real estate. I would like to see if this solution is really interesting from an economic point of view.
In my case, they indicate that they favor residents of the commune and that you don’t have to already be a homeowner. In an article about the Vernier Voie CFF district, it was written “the first complete and solvent applications will win the lots”.
In practice, contacts are important. Without them, I don’t stand much of a chance, but at least it’s for exercise.
As a tenant
1000 CHF/month with charges. I know that the LDTR ceiling has been reached.
For your information, the LDTR applies to housing in Vaud and Geneva. For Geneva, you can find out the ceiling by contacting the OCLPF. A friend of mine discovered that his landlord had exceeded the ceiling, and was able to recover over 10’000 CHF…
As a potential future owner
On this website Tout Savoir sur les Zones de Développement à Genève - bridge-sa, it is stated that the discount on housing in development zones is 25% to 30% compared with the market price.
Considering that the market increases property values by 1%/year, over 10 years the yield would be between 3.3%/year and 3.7%/year.
Then, using Moneyland’s calculator, I take the following values:
The result shows that buying is more favorable than renting, for amounts ranging from 60’000 CHF (3.3%/year) to 90’000 CHF (3.7%/year). The profitability limit is around 2.3%/year with the above assumptions.
Now, for the equity, if I take from the 2nd pillar (50’000 CHF) and if VIAC agrees to pledge my invested pillar 3a (50’000 CHF), I should be able to roughly eliminate the 6% investment interest rate. Over 10 years, I would obtain a gross gain of 130’000 CHF, according to the calculator. With taxes (10% tax rate, i.e. around 22’000 CHF) and notary fees (around 35’000 CHF), I would have a net gain of around 73’000 CHF.
In conclusion, the gain over 10 years is very limited, and makes it impossible to decide. It is therefore necessary to carry out a full risk analysis.
If this analysis is correct, I still have come work to do before I know what to do. 
Presumably the way to look at it is that providing you already decided to buy real estate as a primary residence for an extended time span, then the 25%-30% ‘ZD discount’ translates into a 2.3%-2.7% yearly “windfall return” (tied to certain conditions) over and above market increases.
IIRC there are some exceptions (change of life circumstances) however you’d only be allowed to charge the (lowish) rent set by the canton.
The 2.3% to 2.7% rate is only valid for 10 years. It’s better to say that I get a 30% discount on the purchase. So I would earn 500 * 30% = 150 kCHF maximum at the time of sale after at least 10 years. Quite simply.
I’m only at the “buy or rent?” stage and want to know what’s more interesting for me. I have the impression that the price of real estate in Geneva is so high that even with this discount, it’s better to remain a tenant.
Seems very low unless you are in a rent controlled property
I think the discount depends hugely on location.
The free market price in many parts of Geneva is >12,000 CHF/m2.
In development zones the controlled price is usually set at around ~7000 CHF/sqm. I think the price does vary depending on the location but it is not proportionate to the free market price.
So the best deal was the one in Cologny where those with the right contacts filled their boots with several apartments each. News leaked and after this they tightened the rules a bit.
On the other hand I remember one in La Plaine for ~6000 CHF / sqm that was advertised for a long time.
I am not familiar with “Verier Voie CFF” development but I expect free market prices would be lower than the Geneva average
It’s uncontrolled. A 40 m2 apartment in acceptable condition and outside the city. I think the rent is fair. I know there’s a lot more, but there’s also a lot less.
That’s true. I’ve seen prices between 7000 and 8500 CHF/m2 weighted (they add 0.5x the balcony area). The prices on offer seem fairly stable, regardless of location.