UBS sees holiday flats at a turning point
UBS predicts a period of stagnating prices for the market for holiday flats. The real estate experts of the big bank have observed a slowdown in price increases since autumn 2022. In their view, it will continue.
The prices for holiday flats in Switzerland have risen by an average of 7 per cent year-on-year in 2022, UBS informs in a press release on its current “UBS Alpine Property Focus“. The real estate experts of the big bank have identified the biggest jumps with increases of 15 to 20 percent in the destinations of Arosa, Hoch-Ybrig, Flims/Laax and Engelberg. With prices of around 20,500 Swiss francs per square metre, the Engadin/St.Moritz destination currently leads the ranking of the most expensive second homes in the upscale segment.
Since autumn 2022, however, experts have observed a slowdown in the price increase. According to Maciej Skoczek, real estate economist at UBS CIO GWM and lead author of the study, it will continue in the coming quarters. “A period of stagnating prices is on the horizon,” Skoczek predicts.
According to UBS’s findings, the demand drivers from the pandemic years have now lost their power. “Hybrid working, coupled with a relocation of the primary residence to the Alpine region” was only used during the pandemic, and the holidays shifted to the home country will be replaced by trips abroad again when the restrictions are lifted.
The pandemic left behind around 20 per cent higher prices for two-flats, UBS writes. According to their surveys, the total cost of buying an average flat has also risen to twice the cost of 2019 due to higher interest rates. “Some holiday home owners will consider selling to realise capital gains while escaping the increased costs,” Skoczek says.