Market for Swiss chalets cools down after Covid price boom

© Keystone / Christian Beutler

The prices of holiday homes in the Alps rose by more than 7% in 2022 but there is likely to be a lull in 2023.

The rise in prices of vacation homes is slowing in Switzerland, and in some regions prices have fallen slightly amid rising maintenance costs, normalised demand and a growing supply, according to the UBS Alpine Property Focus report released on Friday.

While prices for second homes soared during the coronavirus pandemic, there has now been a change in trend, as holidays abroad are once again as popular as they were before Covid-19, and working from second homes has proved to be a temporary phenomenon.

“Over the next few quarters, price increases on the vacation homes-market are expected to ease further. There is a period of stagnant prices on the horizon,” said Maciej Skoczek, real estate economist at UBS.

However, the boom during the pandemic has left its mark, with second homes now 20% more expensive than they were in 2020, point out the authors of the study. On average, the purchase price of a Swiss holiday home is around CHF1 million ($1.1 million), a cost that has been exacerbated by the rise in interest rates. The total cost of a typical Alpine apartment is around CHF50,000 a year, twice as much as in 2019.

The Engadine and St Moritz remain the most expensive destinations for a second home in the Swiss Alps, with prices hovering around CHF 20,500 per square metre for an upmarket property. Those with smaller budgets can opt for Gstaad or Flims (CHF17,000/m²) or even Zermatt or Davos (CHF16,000/m²).