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Collapsing demand Swiss Alpine holiday home market fragments under pressure

Snow covered houses in St Moritz

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.

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