Conclusion
The UBS researchers have stood out from the crowd over the last 3 years by calling for a pause in the price appreciation of ski property since the pandemic.
At APi, we continue to believe the concerns on supply growth and buyer reticence are a little too cautious. In particular, the scarcity premium attached to the large and snow-sure resorts – one of the highest priorities for the majority of our clients – is pushing more investment into an addressable market that is gradually shrinking as the snow-line rises due to global warming.
Highlights from the report
The headline is Verbier taking the top slot from St. Moritz with an average of CHF 21.5k/m2, up by 9.9%, with prices levels of CHF 35k for the premium end of the market (additional comments lower down).
The Swiss market remains remarkably short of property for sale, at below 0.7% of the stock overall. In Graubünden a total of 800 apartments (0.3% of the stock) have been approved, but they are for primary residency only – a trend we are seeing elsewhere in the country.
Strong and less price-sensitive demand from overseas buyers remains a theme. Older properties are being renovated to an increasingly high standard, lifting resale prices. Property in Switzerland remains a safe-haven in times of uncertainty.
What about supply growth? Or lack of it.
Little has changed in a year, across the Alps, 2% of the stock was for sale at the end of the first quarter of 2024, up from 1.7% a year ago. The main increase comes from Austria, where strict non-resident ownership regulations are being enforced more vigorously and the German buyer, traditionally the largest in some key resorts, has taken a step back. In the French Alps, 2.4% of the stock is for sale, a significant increase, but not to an alarmingly high level and led in part by an active development market. Indeed, we have thought on many occasions in the recent past that a little more choice would be welcome!
At the other end of the spectrum, Graubünden, the Bernese Oberland and other tourist regions in German-speaking Switzerland are the tightest markets with supply well below 1% of the total.
It is noted that supply levels are lower in the higher value markets. This makes sense to us since lower price ranges tend to be more interest-rate and price sensitive, and given the desire for snow-sure ski areas by the majority of our clients.
Movers and shakers
In terms of the price rankings and the trends in Swiss resorts, values in Graubünden rose the most on average, by almost 6 percent, notably in/around Arosa which has jumped four places to 9th in the ranking.
Verbier may have de-throned St. Moritz on the basis of the publicly available aggregate data, but anecdotally, that does not tell the whole story. For example the Suvretta hillside continues to be one of the most sought-after areas where prices start at CHF 40k/m2 and can reach CHF 75,000 for the most exceptional chalets. The report points out a slight decline in the number of high value purchases in the most recent period in St.Moritz. We see the highest prices paid in Verbier around the CHF 40k/m2 level, which is also the case for 4th ranked Gstaad. We recognise these are the extremes, and make up a small portion of their markets, but the context is relevant for buyers in the luxury segments.
Crans-Montana has moved up two places to 15th, we wonder if the Vail Resorts acquisition has already injected some enthusiasm into a market that spent some years in the doldrums. If it hasn’t, we believe it will.
St. Anton am Arlberg has fallen by five places to 20th, with prices down 10%. Austrian provinces are enforcing more strictly their already stringent ownership rules. It should be noted this is a low-turnover market – there is not a single estate agent in St. Anton.
Perhaps warming up for the 2026 Winter Olympics, prices in Cortina d’Ampezzo can boast the highest percentage increase of them all with prices up almost 20%, moving up by four places to 17th.
Prices in the top Italian resorts increased the most by country, rising 10%, with the leading French resorts marking a 7% gain.
However Megève has slipped by two places to 27th. Despite its undeniable charm and dual-season appeal, we have little doubt that the decline in snow quality there in the last two seasons is having an impact.
The Andermatt story has been an astonishing success, since the first developments were marketed, values have risen by 7.3% annually, now currently at CHF18.8/m2 and ranked 5th overall. It remains the only ski resort in Switzerland where buyers of any nationality can own property.
Where we agree
Readers of our previous articles, and our clients, will know that for many years APi has emphasised snow-sure skiing and a large ski area with the aim of future-proofing your investment, and to enjoy a wide choice of skiing options. UBS makes the connection that the largest and most snow-sure resorts are the ones with the means to finance the best facilities and infrastructure. The report points out that the ski areas that are part of cheaper holiday rental markets are only half the size of that of the top locations. This is a self-reinforcing cycle that, in our opinion, will continue.
Where we disagree
Will there be a buyers strike? UBS thinks so - the report suggests more potential vendors may emerge to lock in price gains, higher ownership costs, and that travel has fully opened up since the pandemic. The APi view is these factors are not mutually exclusive. Ski property buyers are making a long term lifestyle commitment. Costs can be mitigated by an active and robust rental market. Our own levels of enquiries suggest steady levels of interest in property in the mountains from international buyers, and increasingly for use in the summer. Previous recent reports by UBS have pointed to a large cohort of Swiss baby-boomers reaching retirement age with the means to support demand for a few more years.
It remains the case that Swiss secondary residences for sale command a premium over primary, now an average of 20%. This is not surprising but rarely do we see this quantified. However the UBS concern that more are being converted, that will increase supply, in our view is a minor worry since the pace is running at around 1% of the stock annually. Even in Graubünden, where it is almost twice that level, there is minimal reason for concern since the market there is so tight. In more than a few Swiss resorts, including Graubünden, our non-resident clients can find barely any suitable properties - a few more would be welcome.
Kitzbühel, in our estimation, is not the most expensive resort outside Switzerland. Indeed in Austria, you could visit Lech and find (a few) properties in excess of that CHF16.2/m2 price range. In France, we would observe that, for example, both Val d’Isère and Courchevel 1850 have a comfortable lead in the luxury end of those markets.
*The full report PDF is available to download (in German) here: https://tinyurl.com/55ezxman
