What influence does location have on property prices?

Macro situation: A look at the big picture

To understand the influence of a property's location , we need to zoom in. We'll start with the macro-location. This describes the region, municipality, or city.

How attractive is the property's location in an economic context? Regions like Zurich, Zug, or the Lake Geneva area are magnets. They offer jobs, high purchasing power, and excellent transport connections. Properties in these centers benefit from consistently high demand, which drives up prices.

Another typically Swiss factor influencing property location is the tax rate . Municipalities like Wollerau or Kilchberg are expensive not only because of the views, but also because properties located there offer significant tax advantages. Buyers here save money every year, which massively increases the purchase price (and thus the value of the property ). Conversely, an economically disadvantaged region with high taxes can depress the value of a property , even if the landscape is idyllic.

Micro-location: The truth lies on our doorstep

Even more crucial for the daily living value is the micro-location. This focuses on the immediate neighborhood. Two houses in the same municipality can have completely different prices if the quality of the property's location differs at the micro-level.

Micro-location factors that increase the price of a property :

• Peace and quiet: Is the property located in a cul-de-sac or on a main road? Street noise is one of the biggest devaluers of any property .
• Views and sunlight: An unobstructed lake or mountain view can double the value of a property's location . The orientation (south-facing slope) is also essential for a property's location .
• Neighborhood: A well-maintained environment with single-family homes enhances the property's location . Commercial noise or unkempt neighboring properties reduce him .

The location of a property is highly emotionally valued here. Buyers pay for the feeling of privacy and exclusivity that a well- located property offers.

Infrastructure: The Convenience Factor

A well- located property is characterized by short distances. The concept of the "15-minute city" is becoming increasingly popular. How far is it to the nearest supermarket, school, or doctor?

In Switzerland, access to public transportation is a key factor in evaluating a property's location . A train station within walking distance (but out of earshot!) significantly increases the attractiveness of a property's location . For commuters, time is money. If a property's location means 30 minutes less traffic congestion per day, this is directly reflected in the price.

But beware: Proximity to schools is a double-edged sword for a property's location . For families, it increases its value, but for those seeking peace and quiet, the noise from breaks can diminish the property's appeal.

Immutability: Why real estate location is so powerful

Why do experts harp so much on the location of a property ? Because it's the only factor you can't change. You can rip out an ugly bathroom . You can build an extension. But you can't fix the location . You can't make the highway disappear or force the sun to shine.

This risk of immutability is factored into the price. A property in a poor location is considered a permanent drawback. Conversely, a property in a prime location is a scarce commodity that cannot be increased. Since land is limited in Switzerland, a property in a good location acts as a store of value. In times of crisis, prices in less desirable locations fall first, while a property in a top location often retains its value.

Future potential: The development of the property location

Assessing a property's location is always a snapshot in time, but professionals look to the future. How will it develop? The neighborhood ?

• Is a new park being built near the property ?
• Is a major construction project looming that will negatively impact the property's location for years to come?
• Are there gentrification trends that could turn a property in a cheap location today into a trendy neighborhood tomorrow?

A "B-location" can become an "A-location" if the infrastructure is improved. Those who recognize this potential of a property early on can achieve enormous profits. Conversely, the construction of a bypass can devalue a property in a quiet location . Therefore, analyzing zoning plans is essential for accurately assessing a property's location .

City vs. Countryside: Different weightings of location for real estate

The requirements for a property's location vary depending on the surroundings. In the city, a good location is often defined by being "right in the heart of things." Proximity to bars, cultural venues, and workplaces is a plus for a property's location . In the countryside, a property's location is more defined by distance and tranquility. Here, people seek open spaces and nature.

location for a young single person (Zurich's Langstrasse ) is a nightmare for a family. The influence of a property's location on its price therefore always depends on the target group that is suitable for that location. The broader the target group for a specific location , the higher the price.

Conclusion

In summary, location is the foundation of a property's value. It often determines 40 to 60 percent of the total price. While buildings age and lose value, the land in a good location usually increases in value.

The influence is so significant that a small, dilapidated house on Zurich's Gold Coast can be worth more than a palace in the Glarus hinterland. When investing, compromise on the house itself, but never on the location . You can renovate the house, but the address remains the same. Critically examine the macro and micro location, paying attention to noise, light, and infrastructure.

If you are unsure how much the location factor is really worth for your property, Loft helps you to objectively and data-based assess the quality of your property's location .

Glossary

• Property location: The location of a property, subdivided into macro and micro location. It is the most important, unchangeable value-determining factor of a property.
• Macro-location: The broader spatial environment of a property (region, city, municipality). Crucial for its economic viability. Attractiveness of the property's location .
• Micro-location: The immediate surroundings ( street , neighborhood). Factors such as noise and view determine the quality of the property's location .
• Infrastructure: The amenities in the vicinity of the property , e.g. schools, shopping facilities and public transport.
• Immobility: The characteristic that the location (the property's position ) cannot be moved, which makes it a crucial price factor.