Swiss ski resorts remain in high demand

07 December 2023

Please note: The external views expressed in this article are not the views of Barclays Private Bank, and forecasts are not a reliable indicator of future performance. Professional advice should always be sought when selling or buying property.

After the pandemic-induced "vertiginous price growth"1, property values in the Swiss Alps are beginning to recalibrate to more manageable levels. Yet, the captivating lure of these alpine retreats remains as strong as ever, especially as ski resorts continue to adapt and elevate their year-round offerings. 

“We’ve seen ski property values increase 15% per year since the pandemic’s onset2, or more in some resorts – it’s clear the market couldn’t sustain this,” says Jeremy Rollason, Head of Savills Ski.

The pandemic-era's twin catalysts – a new-found hunger for outdoor pursuits, and the rise of remote work and flexible lifestyles – ignited an initial surge in ski property prices. This uplift was further amplified by pent-up demand that exploded as travel restrictions loosened their grip, unleashing a wave of buyers eager to experience the appeal of alpine living.

However, amidst all the pandemic’s disruptions, one force has remained steadfast: the relentless, gradual slow rise in winter temperatures. “It’s felt like we’ve had three consecutive years of dismal snow in Europe, that’s only been exacerbated by lockdowns – you would think it would have been a perfect storm of negativity for the ski industry,” says Alex Koch de Gooreynd, a Partner at Knight Frank.

“Yet, people have kept coming back in their numbers to enjoy the well-groomed slopes, and demand for ski properties has only intensified. And this enthusiasm has been further fuelled by an early start to the current ski season, with resorts across Europe celebrating bumper snowfall.”

This positivity also stems from advancements in artificial snowmaking, which now extends the ski season beyond its natural limits (more than half of all the ski slopes in the Swiss Alps can now be artificially covered with snow3). And while snowpack levels have been in long-term decline, there is still a substantial covering of natural snow each winter, with average summit depths reaching a healthy 230cm in Verbier4 and 220cm in Zermatt5. It paints an optimistic picture. 

“Amidst the backdrop of the pristine Swiss Alps glistening under a blanket of fresh snow, a subtle, yet significant, shift is taking place in the global luxury property market,” observes Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank. “A two-tiered market is emerging, where the most sought-after properties, particularly in the Swiss Alps, are poised to command record prices due to a heightened appreciation for ‘best-in-class’ properties. Meanwhile, other properties may be facing pricing pressures as lingering concerns around inflation, central bank policies and market volatility persist.”

Year-round fun – beyond the snow

Of course, global warming still poses significant challenges (despite early snowfall levels in the current 23/24 winter season in Europe surpassing even the most optimistic forecasts6), particularly for resorts at lower altitude. But the ski industry isn’t standing idly by. Far from it. Instead, many resorts that once fell silent in the mild and pleasant summer months have undergone remarkable transformations, emerging as vibrant year-round destinations. From invigorating hikes to adrenaline-pumping bike rides, serene fishing expeditions and lively summer festivals, these resorts now offer an abundance of adventures for every taste. Once-shuttered shops and restaurants bustle with activity for large parts of the year, marking a fresh chapter as all-season retreats.

“In the past, owning a ski property as an investment wouldn’t have been something to consider,” notes Koch de Gooreynd at Knight Frank. “But with these extended seasons that now span both summer and winter, the appeal lies not just in rental income but also in the lifestyle element it offers. No longer is it a potential hole in your wallet, it’s something that might even add to it as well.”

You can read more about what Switzerland’s ski resorts are doing to attract the summer crowd, in our article ‘The ski resorts betting big on the summer’.

Buyers go higher?

Evidence suggests7 that ski resorts with higher elevations or convenient access to higher terrain – as well as those situated lower down on north-facing slopes that retain snow better – can command premium prices due to their extended ski seasons and more reliable conditions.

Although some higher-altitude resorts, despite having instant access to exceptional skiing terrain, can also be rather desolate and devoid of character, lacking the historic charm and lively ambiance of more established resorts.

Among Switzerland’s most celebrated and vibrant ski destinations, St. Moritz is perched at an impressive 1,856 metres, followed by the mid-altitude enclaves of Zermatt (1,620m), Davos (1,560m) and Verbier (1,500m). Lower-lying resorts include Klosters (1,205m) and Gstaad (1,050m).  

“The correlation between altitude and property value is complex,” says Rollason at Savills. “While there is a general trend of higher-altitude resorts commanding higher prices, there are notable exceptions like Gstaad, which offers year-round appeal despite its relatively lower elevation.

“Overall, resort performance is more strongly influenced by factors like infrastructure, seasonality and all-around vibrancy.”

Swiss resorts also rank highly in Savills' Ski Resilience Index, part of its 2024 Ski Report8, which measures the quality and reliability of a resort’s conditions and its adaptability to climate change. Assessing 61 ski resorts globally, Zermatt, Saas-Fee and St Moritz all hold top-10 spots within the index. 

Resorts retain their appeal

It’s this vibrancy that’s also keeping Swiss ski resorts at the forefront of Alpine property price growth, amidst a challenging global macroeconomic climate and the easing of pandemic-era demand.

While the average price of a luxury chalet across the Alps increased by 4.4% in the past year, according to Knight Frank's 2024 Ski Property Report9, this growth rate is lower than the double-digit increases we've become accustomed to seeing. Yet Swiss resorts continue to outpace the market, with Klosters (15.7%), Davos (12.6%) and newcomer Andermatt (9.3%) leading the pack in terms of price growth.

“Stripping out the pandemic years, this marks the strongest growth rate since 2014," notes Koch de Gooreynd of Knight Frank. “The high proportion of cash buyers in the world's top ski resorts has also insulated them from the effects of rising interest rates.

“Switzerland – unlike some other countries – also boasts an extensive and efficient train network that connects most of its ski resorts. Additionally, the stability of the Swiss franc and the country's commitment to education, evident in the presence of international schools in renowned resorts like Verbier, Gstaad, Villars and Crans-Montana – makes it an attractive destination for families seeking a second home in the mountains.”

Complicating matters for overseas buyers are the rules governing property purchases for foreigners in Switzerland, which restrict the available pool of properties – creating an environment of heightened demand and limited supply. Permits are only granted to foreigners for specific properties situated in designated tourist zones, such as ski resorts.

“This cap on foreigners owning second homes in Switzerland means holiday homes in resorts such as Verbier and St Moritz can generate premiums of up to 20%-25%,” adds Koch de Gooreynd.

Two-tiered trends

For 12 months, Savills has been forecasting a two-tiered trend in the ski property market – with prices in the mid-to-lower end stabilising, and growth persisting in the ultra-prime end. This is corroborated by findings in their recently released 2023/24 Ski Report10, which indicates that so-called ‘prime’ properties (those valued above €750,000) have experienced price falls of 4% over the year, while the ultra-prime segment has exhibited growth. 

Swiss destinations account for half of Savills’ ultra-prime listings, with Verbier witnessing double-digit price increases, and many of Gstaad's most sought-after properties changing hands without ever reaching the open market.

“The enduring charm of the Swiss Alps remains undiminished,” says Stuart Butler, Head of Credit Solutions at Barclays Private Bank Switzerland. “They provide a heady combination of fun and finesse, making them one of the most sought-after property destinations in the world. With ski resorts constantly innovating and enhancing their offerings, they will continue as a beacon of luxury and exclusivity.”

Rollason at Savills concurs, adding: “Because of the limited supply and high demand, prices have been maintained at the top end of the market. We also think that overall, the main market is going to be insulated and protected, despite the economic uncertainty. As we work through the cycle, we expect a handful of distressed sales, but for the first time in probably two decades the alpine market is actually behaving in a non-cyclical fashion, which should support prices going forward.”

In summary

Swiss ski resorts remain at the forefront of Alpine property price growth, and for good reason – their future gleams with all the potential of a sun-soaked ‘bluebird’ ski day.

“Their remarkable resilience can be attributed to their ability to adapt to challenges, their unwavering fundamental appeal, and limited property supply, particularly in ultra-prime destinations,” concludes Moroukian at Barclays Private Bank. “This is further reinforced by Switzerland's restrictions on foreign property ownership, a factor that has created a dynamic of high demand and limited supply.”

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