Second home prices soar
Real estate prices in the mountain cantons are up by almost 10 percent. This is the highest price increase in the past twelve years. The construction freeze for second homes imposed in 2012 reduces the required supply of holiday homes, but does not have a negative effect on value stability.
In a press release , the major Zurich bank UBS informed about an increase in the price of holiday apartments in the Alpine region. With a price increase of almost 10 percent, residential real estate has reached its highest level in the past twelve years. Arosa GR, Engelberg OW, Flims/Laax GR and the Jungfrau Region, where prices have risen by 15 percent, are most affected.
Based on the findings of the Alpine Property Focus study, UBS explains the price increase, among other things, with a decline in supply and increasing demand. As a result of the corona pandemic, working from anywhere has become attractive. Many working people have moved their desk and primary residence to the holiday regions.
Furthermore, held back sales have led to the tense supply situation on the residential real estate market. According to this, many owners would have refrained from a planned sale of the holiday apartment because of their own needs for their home office.
The Second Homes Act, which has been in force since 2012, has also had an unfavorable effect, ordering a de facto freeze on the construction of second homes in tourist regions. However, the stable value of residential real estate is said to be unaffected by the lack of new housing construction.
As a result of the high capital costs when buying a holiday home and rising interest rates at the same time, the demand for holiday homes is likely to fall again, according to experts. The real estate economist at UBS, Maciej Skocz, quoted in the study, also includes the increased energy costs and expects “a good third higher usage costs” for an “average holiday home” for 2023 compared to the “beginning of the second home boom in 2020”. In the medium term, the expected increase in the supply of second homes will regulate the current price explosion again.