Despite the construction of thousands of new homes in Geneva, the lack of property for sale continues to lead to an exodus of people to neighbouring canton Vaud and France. This has negative consequences for the local economy and transport, a Credit Suisse study reveals.This content was published on September 5, 2018 - 15:14
With its high salaries and standard of living, Geneva is a victim of its own success and every year attracts thousands of people to live and work. But finding a place to live can be a headache. Few people – 18.5% of residents, half the national average of 38.2% – own their homes in Geneva; the rest rent.
The tiny canton at the western end of Lake Geneva, surrounded on almost all sides by France, has always suffered from an acute housing shortage – places to rent and buy – with demand far outstripping supply. And according to a recent survey by Credit Suisse, the situation is not getting any better, especially in the “affordable” housing-to-buy segment, and it has unwelcome consequences.
The report states that the lack of homes to buy in Geneva continues to lead to an exodus from Geneva. Around 2,000 people move to France every year, down slightly from the 2011-2012 peak. Over the past ten years, 20,000 people have left Geneva to settle over the border in France. Also, around 600-700 people a year – down from the 2007-2011 peak – move to neighbouring canton Vaud. Owning your own home was the second factor behind the exodus, after better quality of life and ahead of the high accommodation prices.
The study found that most people moving out of Geneva are highly qualified; 68% have a university education and 35% hold managerial posts. The flight thus results in a financial loss – tax revenue and money spent locally – estimated at CHF530-700 million ($543-718 million) a year, according to Credit Suisse economist Sara Carnazzi Weber.
Another consequence of the lack of affordable property to buy is that transport infrastructure is saturated. The number of cross-border workers making the journey back and forth into Geneva by car continues to increase steadily. Every day 550,000 people cross Geneva’s borders with France and Vaud, most in private cars. This figure is expected to rise to 694,000 by 2020. A third of people questioned by the Federal Statistics Office and Credit Suisse say that they are frequently concerned by traffic jams, versus 20% for Zurich and Basel.
Against this backdrop, local officials are hoping that a major new cross-border rail system, known as CEVA/Leman Express, which is due start operating at the end of 2019, can help reduce Geneva’s gridlock.
The housing problem remains despite efforts from the local authorities. Between 2000 and 2017, 27,000 new apartments and houses were built, and construction work has been stepped up since 2015. But the fast-growing Geneva population needed 38,000 homes.
Carnazzi Weber complains that for many years the “response of the real estate market to strong growth in the canton has been inappropriate”. She said the delay was partly due to “tough market controls”. The report says there has been too much focus on rental accommodation versus property to buy in housing development zones managed by the state in areas outside the city centre.
The report showed that potential new buyers were being priced out of the market. Credit Suisse said a “typical married couple” was most likely unable to afford a mid-priced condominium (PPE in French) in Geneva. Between 2004-2017, while their annual income had risen by 22%, the price of condominiums had skyrocketed by 140%.
The solution to Geneva’s housing problems, the authors insisted, was a “much higher level of construction in all segments of the residential real estate market”.
Geneva and France
Switzerland’s second biggest city is at a busy crossroads with France and the Alps. Just under one million people live in the city and extended region known as Greater Geneva, the Franco-Valdo-Genevois region between Nyon in canton Vaud, Bellegarde-sur-Valserine, Annemasse, Meyrin, Bonneville, Thonon-les-Bains and Geneva. By 2030, the region is forecast to grow by at least 200,000 residents.
According to official statistics, the population of canton Geneva is expected to rise by 21% between 2015 and 2040 – to 587,500 people. The population of the cross-border Geneva region (Geneva transfrontalier, which is just slightly bigger than the Greater Geneva area), is also expected to rise to between 1.2 and 1.3 million between 2015 and 2040.
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