Biggest increase in 12 years: holiday apartments become more expensive again
Anyone who wanted to buy a holiday home last year had to dip even more into their pockets: the prices for your own jewel or chalet in the mountains rose by almost 10%.
The dream of a second home became even more expensive last year: Specifically, compared to 2020, prices rose by almost 10% on average for all Swiss destinations. This is the largest price increase in 12 years, as the major bank UBS announced on Tuesday. She dealt with the holiday home market as part of a study.
There is no region in the Alps where holiday apartment prices have fallen over the past year. According to UBS, this has never happened since data analysis began 15 years ago. With more than 15%, prices rose the most in Arosa, Engelberg, Flims/Laax and the Jungfrau region. The smallest increase was recorded in Adelboden/Lenk with less than 1%.
St. Moritz in the Engadine remains by far the most expensive tourist destination in the Alps. According to UBS, a holiday home in the upper segment costs around CHF 19,500 per square meter. This is 11% more than the previous year. It is followed by Gstaad in the Bernese Oberland with CHF 17,000 and the Jungfrau region with just under CHF 16,000 per square meter. In Zermatt and Davos/Klosters you pay more than 15,000 francs.
The market is practically empty
UBS attributes the price increase to the consequences of the corona pandemic, which increased demand. Travel restrictions and the obligation to telecommute have reportedly led to a strong rush for holiday properties in the Alps. In addition, the supply of available housing has decreased: in the regions of Graubünden, Bern and Central Switzerland, less than 1.5% of the housing stock is currently offered. In Valais and in the canton of Vaud, the average supply rate is 6%. However, it remains “significantly” lower than the values of the previous year.
UBS cites the Second Homes Act as the reason why almost no new holiday homes have been allowed to be built in tourist regions since 2012. In 2021, only around 0.25% of the existing stock in holiday destinations holiday received planning permission – “a long-term low”. And due to the corona pandemic, the owners of a chalet also increasingly refrained from selling because, according to the large Swiss bank, they used it much more often themselves.
Demand and prices will weaken
UBS assumes that demand is now likely to weaken due to currently high prices. Because: “The higher the price level, the smaller the potential demand group that meets the accessibility criteria for debt financing”, writes the big bank. Then there are the higher interest rates.
For the author of the study, Maciej Skoczek, it is therefore clear: “Taking into account the ever higher energy prices, the total costs of use of an average holiday home should already be a good thirds higher next year than before the start of the second real estate boom in 2020.” The expert now expects a slowdown in price increases for the current year. “On average, for all vacation regions, prices are expected to increase in the single-digit percentage range in 2022,” Skoczek said in the release.
The bank also warns against “the illusion of the guarantee of value”: stopping the construction of second homes acts as a guarantee of long-term value in the second home market. However, this does not provide protection against price excess corrections.