Zurich luxury apartment auctioned off: foreclosure auction throws 5.9 million property under the hammer

One of the most spectacular foreclosures in recent years took place on Zurichberg at the beginning of February 2023: A 6½-room garden maisonette, including four underground parking spaces, changed hands for 5.9 million CHF, about 300,000 CHF below the official appraised value. The winning bid came from a couple from Zermatt, who managed to outbid a competitor from Zurich in the two-way contest.

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1 Property Overview

• Location: Forster-/Krönleinstrasse, Fluntern District, elevated south slope with a view over the city and lake.
• Type & Size: 6½-room garden maisonette in a concrete complex built in 2012 ("Bunker" complex).
• Appraised Value: 6.2 million CHF (including four garage spaces), sold for 5.9 million CHF.
• Features: Private elevator, large bicycle room, private garden area, four parking spaces in the underground garage.
• Deposit: 100,000 CHF had to be paid immediately before the auction closing.

“An offer of 5.9 million remained unanswered, thus the couple acquired the apartment below market value…”

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2 Chronology of the Auction

Date	Event
27.01.2023	Zurich Debt Collection Office publishes auction announcement, appraised value 6.2 million CHF.
02.02.2023	Public auction at the Hottingen Parish Hall, four bidders drive the price from 2.93 million (minimum bid) to 5.9 million CHF.
03. - 13.02.2023	Ten-day appeal period according to Art. 156 para. 2 of the Swiss Debt Collection and Bankruptcy Act (no appeals).
March 2023	Transfer of ownership registered in the Fluntern land registry after full payment of the purchase price.

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3 Legal Pillars of Zurich's Foreclosure Process

3.1 Foreclosure Process According to Swiss Debt Collection Act

1. Debt Collection Request (Art. 67 ff.) by the creditor, in this case, the financing bank.
2. Foreclosure Request (Art. 151) due to a property claim of 2.93 million CHF.
3. Public Announcement & Appraisal at least four weeks prior to the auction date.
4. Auction without Double Calling as there were no additional mortgages or rights of use.
5. Auction Award (Art. 143) immediate deposit of 100,000 CHF, remaining payment within the agreed deadline.

3.2 Particularities of the Zurich Market

Foreclosures are extremely rare in the city of Zurich: In 2022, there were only three cases throughout the city, according to the Debt Collection Office.

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4 Economic Classification

• Discount Despite Premium Location: 5% below the appraised value may sound slight, but it is significant for properties on Zurichberg, as new builds here often fetch a 10% premium over market value.
• Comparative Value: Newly constructed condominiums on Zurichberg currently achieve an average of 25,000 CHF/m², even conservatively calculated, the effective m² price of the auction is below 23,000 CHF.
• Immediate Benefit: Since no rental contracts or servitudes needed to be taken over, the new owner can move in or rent out the apartment immediately (short-term yields of up to 4% p.a. in the luxury segment).
• Risk Buffer: The price discount provides room for renovations or later value increases due to market development.

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5 Opportunities and Success Factors for Future Bidders

1. Prepare Deposit: Zurich authorities generally require a 100,000 CHF bank guarantee or cash deposit immediately after the third call.
2. Study Appraisal Report: It contains essential information about m² prices, potential construction defects, and condominium regulations.
3. Define Market Limits: The couple from Zermatt remained strictly within their budget and still won, price discipline avoids subsequent financing risks.
4. Utilize Context: In hall auctions, audience pressure can intimidate competitors, and those who present themselves decisively signal financial capability.

FAQ about Zurich's Foreclosure Process

Do I need to apply for a Lex Koller permit as a foreigner?
For pure residential use without second home status, third-country nationals generally require a permit, while Swiss citizens and EU/EFTA citizens with residence do not.

What additional fees are there?
Debt collection office fee approx. 1.5% of the final bid, plus land registry costs of 0.5%.

Can I withdraw from the purchase after the auction award?
No, the auction award is legally binding once the appeal period has expired, failure to pay may result in compensation claims and re-auction.

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6 Lessons from the Zurichberg Case

• Speed Pays Off: The winning couple transferred the 100,000 CHF deposit before the start of the auction and acted confidently.
• Transparency Builds Trust: Publicly announced minimum bids create fairness for all parties involved.
• Rarity as a Value Driver: Since foreclosures are rare in Zurich, even bargain properties achieve stable market prices in the long term.

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7 Conclusion

The 5.9 million CHF auction on Zurichberg impressively demonstrates that property foreclosures in the top segment offer attractive opportunities. Clearly regulated processes according to the Swiss Debt Collection Act, full transparency, and a disciplined bidder mindset transform perceived forced sales into win-win situations for buyers and creditors. Those who understand legal foundations, secure financing commitments, and carefully analyze the market can enter the premium league of Zurich real estate with relatively manageable risks.