When you go on a vacation, what do you imagine? Do you imagine panoramic penthouses, elegant estates, and majestic mansions and think about how you can own one? In the Swiss alps property market today, buying a home will turn out to be a lot cheaper than renting out, according to the Credit Suisse real estate study for 2019. This buying advantage is due to current low mortgage interest rates.
Why Is It Best to Buy a Property in the Swiss Alps Market
Now is the best time to invest in the Swiss alps property market. In general, property prices fell by 0.5%, showing a significant improvement from last year’s 1.8% price fall. Most of the improved performance comes from Verbier (3.4%) and Villars (6.0%) ski resorts. These two ski resorts posted positive growths due to the rising recognition of their strategic locations and offerings. Verbier boasts of sunniest resorts that offer more leisure activities, while Villars has tons of international schools making it ideal for parents who want to live nearby.
The improvement in these areas was mainly due to their investments in more ski lifts, world-class hotel constructions, and multi-purpose sports centres. Following these substantial investments are improvements in property prices, as investors see long-term investment strategies in place.
Year-on-year prices of second apartments in Verbier and Gstaad appreciated by over 10%. The regions of Jungfrau, Davos/Klosters, St. Moritz, and Zermatt also posted significant increases, mainly due to lower vacancy rates (2.5%) compared with other regions.
The Rise of Residence Hoteliere
In 2013, the Swiss government passed the Lex Weber ruling, which sets a 20% cap on the second home in Swiss communities. Both residents and non-residents can no longer buy or build second homes once the threshold is reached. The law aims to prevent cold beds or empty second homes that often exude the ghost-town feel. Similarly, the law’s goal is to attract more tourists and subsequent investments into the local economy through higher occupancy levels.
To comply with this law, many developers chose to build hotel-style residences that provide full services. This way, buyers can still own a holiday home in the premise that they will make the property available for rent when they are not using it. Aside from the returns, owners also have the opportunity to use their residence up to six weeks annually. Since the acquisition falls under commercial property, it is not covered by residency restrictions.
When deciding to buy a property in the Swiss alps property market, it is best to go for regions that offer more than the usual ski activities. While skiing is big among baby boomers, younger generation of investors are looking for variety. These resorts have to diversify their offerings if they want to stay relevant for years to come. While putting tons of investments on ski lifts and ski tows will boost tourists, they are still not enough to attract tourists with evolving demands. The latest data show that as much as 25% of tourists are non-skiers.