Swiss ski properties scale new summits

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.”

Related articles

See more

This communication is general in nature and provided for information/educational purposes only. It does not take into account any specific investment objectives, the financial situation or particular needs of any particular person. It not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful for them to access.

This communication has been prepared by Barclays Private Bank (Barclays) and references to Barclays includes any entity within the Barclays group of companies.

This communication:

• is not research nor a product of the Barclays Research department. Any views expressed in these materials may differ from those of the Barclays Research department. All opinions and estimates are given as of the date of the materials and are subject to change. Barclays is not obliged to inform recipients of these materials of any change to such opinions or estimates;
• is not an offer, an invitation or a recommendation to enter into any product or service and does not constitute a solicitation to buy or sell securities, investment advice or a personal recommendation;
• is confidential and no part may be reproduced, distributed or transmitted without the prior written permission of Barclays; and
• has not been reviewed or approved by any regulatory authority.

Any past or simulated past performance including back-testing, modelling or scenario analysis, or future projections contained in this communication is no indication as to future performance. No representation is made as to the accuracy of the assumptions made in this communication, or completeness of, any modelling, scenario analysis or back-testing. The value of any investment may also fluctuate as a result of market changes.

Where information in this communication has been obtained from third party sources, we believe those sources to be reliable but we do not guarantee the information’s accuracy and you should note that it may be incomplete or condensed.

Neither Barclays nor any of its directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this communication or its contents or reliance on the information contained herein, except to the extent this would be prohibited by law or regulation.