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House Hunting in Switzerland: Mediterranean Flair on Lake Lugano

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This low-slung three-bedroom villa overlooks Lake Lugano and the mountains of northwest Italy from Lugano, the biggest city within the Ticino region of southern Switzerland.

Inbuilt 1980 and renovated in 2009, the two-story house, with about 1,930 square feet of interior space, borrows from the Spanish Mediterranean style with its arches, tiled roof and wood-frame accents. The style is in step with the final ambience of Ticino, referred to as “Switzerland’s Mediterranean” for its mild climate and laid-back lifestyle, said Ueli Schnorf, owner and chief executive of Wetag Consulting, which lists the property.

The rooms are “few but very large,” designed to maximise the expansive views, Mr. Schnorf said. The primary floor consists of the kitchen and open-plan living and dining room with a vaulted ceiling and wood-burning fireplace, and opens to a big stone-inlaid terrace with seating and dining areas. The westward views from a terrace and swimming pool absorb the lake and the Swiss-Italian border.

“It’s a superb position since you’re on a bit of hill with a big green area around you and a large view over the lake and the mountains,” Mr. Schnorf said. The 0.13-acre plot also features a one-car garage and outdoor spaces for 2 cars.

The lounge includes a timbered ceiling and a wood-burning fireplace, however the view from the image window is the star attraction. A smaller room off the living area is configured as a den, but might be a guest bedroom. The kitchen is up to this point with integrated appliances, high-finish cabinetry and stone countertops.

The first bedroom follows the minimalist aesthetic of the living spaces, with a white wall of built-in closets and a black accent wall behind the bed.

One story down, a second lounge has its own wood-burning fireplace and doors to a terrace. Also on this level are a wine cellar, a 3rd bedroom, a full bathroom and a big laundry and storage room. Sliding glass doors open onto a small terrace bordered by natural greenery. Wide-plank oak floors run throughout the home on each levels.

With 62,000 residents, Lugano is the biggest city in Switzerland’s Ticino region, where Italian is the official language. The town center, about six miles from the Italian border, reflects the neighboring culture in cuisine, language and lifestyle. Lugano can also be Switzerland’s third largest financial center, after Geneva and Zurich.

The town is served by several train lines: the Swiss Gotthard railway, the Swiss Federal Railways and the Trenitalia regional and international lines. The closest international airport is in Milan, about 50 miles south.

Political and financial stability, in addition to excellent infrastructure, health care and education, contribute to Switzerland’s standing as one in all the world’s costliest places to live, said Simon Incir, owner of the Engel & Völkers affiliate office in Lugano. “Switzerland could be very stable and secure for international people,” Mr. Incir said,

And Ticino is one in all its priciest regions, which the housing stock anchored by noble palaces built from the sixteenth to 18th centuries. One other period of development within the nineteenth and early twentieth centuries saw a combination of classic and more flamboyant villas built by a category of latest wealth, while newer construction evokes Mediterranean styles and ultramodern architecture.

Mr. Incir said that stricter government lending policies have limited the general marketplace for foreign buyers — most banks require 50 percent down — however the premium sector stays robust.

“After Covid, we had numerous demand from all around the world and particularly families with a really high power of purchase,” he said. Housing within the lower segment of the market ranges from 500,000 to 1 million Swiss francs ($530,000 to $1.06 million), with the midrange going as much as about 2.5 million francs ($2.65 million).

An Engel & Völkers market 2018 report on Lugano ranks Monte Brè, east of the town center, and Collina d’Oro, on a peninsula southwest of the middle, amongst Lugano’s most sought-after areas. Mr. Incir said the trend has not modified: Current listings by the agency range from $6.63 million francs ($7.02 million) for a five-bedroom Monte Brè apartment overlooking the lake, to 14 million francs ($14.8 million) for a six-bedroom villa in-built 2016 with a pool and various amenities in Collina d’Oro.

Alessandro Dubini, owner of Domus Realty in Lugano, said Ticino enjoyed an 11-year price boom before the pandemic slowed the market. Now, he said, “there may be one other boom because of latest customers searching for extra space to work from home, more outdoor and green spaces.”

“In 2021 we had a one hundred pc increase in demand in comparison with 2019, and now in 2022, we have now one other 50 percent in comparison with 2021,” Mr. Dubini said. “Anything latest and modern we sell or rent quickly.” His current listings include a 2,195-square-foot, two-bedroom apartment for two.9 million francs ($3.1 million) and a 2,580-square-foot, three-bedroom apartment in the middle with lake views for 3.78 million francs ($4.01 million).

Matteo Degli Agli, owner of MDA Group Real Estate, said prices in Lugano have increased by about 10 percent because the onset of the pandemic — a rise that UBS, Switzerland’s largest bank, also reports for luxury and second homes.

“Buyers want an additional room for an office, or a garden or a terrace,” he said. “Villas are more requested and don’t stay available on the market — they’re sold inside two or three months.”

But a recent Real Estate Bubble Index compiled by UBS warns of “a transparent overvaluation of the local housing market” and the likelihood of “an imminent price drop.” The index rose only 0.1 percent point, to 1.58, in parallel with consumer prices within the second quarter of 2022. Due to a limited housing supply, nonetheless, the bank notes a price correction is “unlikely in the following 12 months.” Ticino has a low “relative risk assessment,” in accordance with the report.

Mr. Degli Agli estimated prices in the middle of Lugano at 7,000 to 27,000 francs a square meter ($690 to $2,660 a square foot), with high-end amenities and views commanding the best prices. “For 27,000 francs, you need to get a luxury flat or villa with a lake view, a garden and a pool,” he said. In the center range, expect to pay 10,000 to 12,000 francs a square meter ($985 to $1,185 a square foot).

Mr. Schnorf said that before the pandemic, about 30 percent of buyers in Ticino were northern Swiss, with much of the remaining coming from elsewhere in Europe. Now, with less interest in traveling abroad, Swiss buyers are filling more of the market.

Mr. Degli Agli has seen the identical trend. “They resolve to take a position within the Ticino market as an alternative of going to Sardinia and other resort locations,” he said. “The organization and mentality is of the Swiss people, however the culture and restaurants have the Italian lifestyle.”

Mr. Dubini said that he fielded more rental queries from Americans and non-Swiss Europeans throughout the pandemic, especially from France, German and Italy. “Here in Switzerland, we had more freedom than in Spain and Italy. The bulk got here here to rent to see how life is here, and after a 12 months or two now are asking for houses to purchase.”

Foreign buyers are limited on the scale of the property they buy if it is just not intended as their primary residence. Nonresident owners who live abroad and use their Ticino property just for holidays are limited to homes with a maximum of 200 square meters (2,150 square feet) of living space and 1,000 square meters (0.25 acres) of land — an edict meant “to discourage speculation and protect the Swiss from being priced out of their very own market,” Mr. Schnorf said.

Italian; Swiss franc (1 franc = $1.06)

The annual property tax for this house, like all purchases in Ticino, relies on the client’s assets, Mr. Schnorf said. Foreigners who’ve an annual income of no less than 750,000 francs ($790,000) can apply for a flat-tax scheme — also arranged on a case-by-case basis with the canton — with a median minimum payment of 130,000 francs ($138,000).

A notary or public officer (depending on the region) performs due diligence and steers the transaction, said Gianni Masera, a partner who focuses on real estate at Masera & Della Casa’s Lugano offices. The fees amount to about 0.5 percent of the worth.

Stamp duties and other transfer taxes vary by region or municipality; in Ticino, the stamp duty is 3 percent of the acquisition price. Other fees, similar to the official purchase authorizations, can run from little or no as much as about $30,000, “on the discretion of the authority and depending on the complexity,” Mr. Masera said.

Fees for Ticino regional and municipal certificates are one other 200 francs ($212), paid by the client. Broker commission fees are from 3 to five percent, paid by the vendor.

Ueli Schnorf, Wetag Consulting Immobiliare SA; +41 (0) 91 601 0440; www.wetag.ch

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