Swiss ski properties scale new summits

07 December 2022

Please note: The article does not constitute advice or a recommendation.

As skiers make their first tracks down the slopes this winter, property prices in the Swiss Alps continue to head in the opposite direction – surging to ever-higher peaks.

“There’s been a step-change increase in asset values across the Swiss Alps in the last couple of years, all this despite the impact of the pandemic on international travel,” says Jeremy Rollason, Head of Savills Ski.

Data from Savills reveals asking prices in prime ski resorts have climbed 20% on average in the last 12 months alone, adding up to a 30% increase since 20201, with Knight Frank reporting that the price of a ski home is rising at its fastest rate for eight years, according to their latest Ski Property Index2.

“Ski resorts have been major beneficiaries of the pandemic-fuelled ‘race for space’, a characteristic of the property market during COVID-19 – with people looking for properties suited to their changed lifestyles,” says Stuart Butler, at Barclays Private Bank.

In many ways, the big-hitter resorts – the likes of St Moritz, Verbier, Gstaad, Davos-Klosters and Zermatt – have become the ultimate work-from-home getaways. Glamourous winter wonderlands, full of spectacular scenery and skiable terrain, this new-found desire for clean air and wide-open spaces has also made them just as appealing in the summer – with their hiking and mountain biking trails, and health and wellness retreats.

“Properties in ski resorts have always been coveted purchases,” adds Rollason at Savills. “But add in the huge uptick in demand post-pandemic, as well as the chronic supply shortages – you can’t just build in the Alps – and in Switzerland there’s also a moratorium on second homes at the ski resorts. It’s all combined to push prices to new heights.” 

New buyer opportunities

Navigating the property buying rules in Switzerland can be tricky for non-residents. Foreigners can only buy in designated holiday zones away from the main cities, mainly the ski resorts as well as Montreux and Lake Lugano – for properties with a maximum living space of 200 square metres. To complicate matters further, Swiss authorities limit the number of second homes in any given location to 20%. Most ski resorts are already at this limit, restricting second-home buyers to the crowded resale market.

However, a new wave of hotel-style residences is in the pipeline at many of Switzerland’s top-end resorts, with the individual apartments set to be classified as commercial purchases and not subject to these stringent rules – allowing investors to buy and sell with less friction. These new-build developments will have all the conveniences of a hotel, but the units must then be rented out when not in use by the owner.

“These hotel-style residences – which are likely to start coming on to the market in the next year or so – could be an interesting option for some buyers, especially as they will provide an income when the owner’s not there,” says Alex Koch de Gooreynd, Swiss Property Partner for Knight Frank.

Market resilience

There are, however, early signs that the breakneck pace of property-price growth is easing off in the Swiss ski resorts – with uncertainty in the wider economy beginning to feed up into the Alpine markets.

“Generally, there’s a feeling we will have to have a little slowing,” says Koch de Gooreynd. “We probably won’t be seeing the huge double-digit increases of the last couple of years – however, we do expect price rises to continue at the Swiss ski resorts, albeit at a more modest rate.”

Koch de Gooreynd reasons that while house prices may now be falling in mainstream markets due to rising mortgage costs, at the top end of the market, cash-rich buyers – who are more reliant on equity rather than debt – tend to predominate and so are less exposed to any rising interest rates, cushioning them from some of these affordability concerns. He also points out that inflation and interest rates in Switzerland3 are running at a fraction of their global peers, while in times of global uncertainty, the Swiss franc also tends to be a go-to safe-haven currency. “Traditionally, it’s a very resilient market,” he adds. 

This resilience has been in evidence during the pandemic, with Switzerland one of the few Alpine countries to remain fully open to skiers – albeit under controlled circumstances – during the last two winters. Climate change is also forcing ski resorts to get creative, and the Swiss are becoming much more resilient in other ways as our accompanying article explores: Swiss ski resorts aim for a snow-sure future.

Demand for property

With the new 2022/23 ski season up and running, it promises to be another exhilarating one for visitors to the Swiss Alps – especially now that all COVID-19 travel restrictions and requirements have been lifted in Switzerland. 

“The demand from high-net-worth individuals to purchase property in the Swiss Alps remains elevated, even though the Swiss franc is strong and market prices high,” says Pascal Nagel from Barclays Private Bank Switzerland. “Such demand continues to make Swiss property an attractive investment opportunity, arguably more so than before COVID.”

Rollason at Savills concurs: “Ski properties are becoming a much more recognised asset class to park wealth. The trend started in 2020 and it’s kept on going; the price rises are astonishing really. And because the top-end of the market is reasonably well insulated, the impact of tightening monetary policy is likely to be limited on property prices in the prime ski resorts.”

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