Swiss Alpine holiday home market fragments under pressure

Areas like St Moritz are insulated from the downturn in demand for holiday homes. Keystone / Arno Balzarini

The market for holiday homes in the Swiss Alps has divided into the haves and have nots with only the most expensive regions recording growth, according to a report from UBS bank.

Areas like St Moritz, Gstaad, Verbier, Zermatt and Davos saw price gains of as much as 10% last year. But the cost of apartments in less exclusive mountain resorts remained flat or even fell. The same trend could be seen between luxury and non-luxury segments; only properties attracting prices in excess of CHF8,500 ($8,400) per square metre gained in value in 2018.

Overall the Swiss alpine property market saw little movement in prices, unlike in Austria (+25%) and France (+15%). Only Italy fared worse, with a fall in prices of 10%.

This has left some Swiss holiday destinations with growing vacancy rates, particularly in the French-speaking cantons of Valais and Vaud. Across the whole Alps, vacation rates in tourist regions are nearly double the national average. This is despite a restriction on building second homes in Switzerland following a 2012 national vote.

The researchers also don’t see much change in this pattern in the immediate future. Despite a still weak Swiss franc, demand for Swiss second apartments from has tailed off, apart from in a few exclusive areas, says UBSExternal link. Foreigners were net sellers in the market last year.

In addition, an expected slowdown of the Swiss economy and a trend of depopulation in Alpine areas is expected to weigh further on the market.