Soaring prices. St. Moritz retains the most expensive location
St. Moritz remains by far the highest-priced tourist destination in the Alps: in 2021 an upper end secondary residence was priced at approximately 19,500 Swiss francs per square meter, up nearly 11 percent from the same period of the previous year, a periodic study released today by UBS reveals.
Gstaad (BE) comes in second place, at 17,000 CHF per square meter, and the Jungfrau region (BE) ranks third, at almost 16,000 CHF; in Zermatt (VS) and Davos/Klosters (GR) second homes cost 15,000 CHF per square meter.
No region in the Alps recorded a decline in vacation home prices in 2021: the first time since the beginning of the bank's surveys 15 years ago. When compared to 2020, observing all Swiss destinations, prices have risen by 10 percent, the sharpest increase since 2008. Arosa (GR), Engelberg (OW), Flims/Laax (GR) and the Jungfrau region (BE) saw the highest price increases, with more than 15 percent. The lowest value was seen in Adelboden/Lenk (BE), with +1%. No locations in Ticino were considered.
According to UBS experts, the restrictions on travel throughout the pandemic and telecommuting have sparked a rush to secondary housing. The aspiration to own a home in the mountain has also been fueled by good economic performance in 2021, as the assets and income of households have also advanced in parallel. The uncoupling between the place of residence and place of work has also resulted in many households choosing to establish their main residence in the mountains. As a result, for the first time in more than 15 years, the population growth in mountain cantons was higher than the average for all other cantons.
As a result, the market has dried up: by virtue of the law in tourist regions practically no new secondary housing is allowed to be built. In addition, many vacation home owners have postponed or even given up on an already planned sale because they have been able to make much more use of their property thanks to telecommuting. As a result, the supply of available properties has decreased even further. Currently in the regions of Graubünden, Bern and Central Switzerland, less than 1.5 percent of real estate is offered for sale. In Valais and Vaud the supply quotas are much higher, averaging 6 percent, but still well below the previous year's values.
According to UBS experts in light of the currently high prices, demand for vacation homes is expected to decline. The sustainability criteria for third-party financing, rising interest rates, as well as energy costs are weighing heavily.
In the long run, the de facto construction halt brought in by the Second Homes Act may be a safeguard for the market value of homes. However, according to UBS, this should not obscure the fact that the legislation will not protect against corrections of price excesses and will not stop fluctuations in supply. The latter is expected to increase again as early as 2022, with some homeowners taking advantage of the current upward phase to realize capital gains and to escape the costs of upcoming renovations. In this context, foreign owners also benefit from the strength of the Swiss franc.