Properties on ski resorts in Europe are gaining popularity and becoming a fashionable trend this season. Portal ee24.com has already written about real estate markets on ski resorts in Germany, Italy, Austria and France. Now the time has come for their respectable neighbor: Switzerland. Why are ski resorts of Switzerland better than their foreign competitors? Why is housing there more expensive? Why does the demand always exceed supply and how do local laws influence it, we talked to Nathan Coltof, co-owner and founder of Swiss real estate company Leisure Properties GmbH, who answered these questions specially for ee24.com.
Winter in Swiss Alps
– Foreigners’ (especially Russians’) interest to ski resort real estate in Switzerland: who buys (nationalities) and what types of properties are most preferred and in what budget? What is the demand from Russian clients?
– The majority of the clients from Russia that are interested in acquiring real estate in the Swiss ski resorts are looking for exclusive apartments or luxurious chalets. These properties are mostly situated at a close proximity or directly on the ski slopes and offer spectacular views over the Alps. The budget that our clients have for these properties ranges from €650,000 to luxurious chalets of over €3,000,000.
People from other countries that acquired ski resort real estate through the consultation of our company are Dutch, English, Norwegian, Danish, German, Swiss, American, Belgium, French and Chinese families.
Ski resort Crans-Montana
– Tell us about the main ski resorts in Switzerland and prices for real estate there. What are the pros and cons of these places?
– Switzerland offers 39 main ski resorts. The best known resorts are: Aletsch Arena (Valais), Zermatt (Valais), Verbier (Valais), Crans Montana (Valais), Portes du Soleil (Valais), Saas-Fee, (Valais), Leukerbad (Valais), Gstaad (Bern), Davos (Graubünden), St. Moritz (Graubünden) and Laax (Graubünden). The average prices per squares meter range from €6,000 to over €30,000 per square meter, depending on a ski resort and the position within that particular resort.
Every ski resort is different from another. Some have the advantage to be car-free, which means that the only possibility to reach the ski resort is by lift (Aletsch Arena), and others have the advantage of having over 650 kilometers of ski pistes (Portes du Soleil). Regarding real estate however there can be some disadvantages to some ski resorts. If the ski resort is not car-free, it could mean that in order to reach the closest ski slope one has to use public transportation or private transport to begin the enjoyable day of skiing on the Swiss slopes.
Ski resort Verbier
– New-built real estate in Switzerland is getting much more expensive due to Weber’s law, as there are restrictions on new housing construction. How much does it affect pricing in general and prices for ski resort properties in particular?
– The prices for real estate in Switzerland have been rising in the past few years due to various factors. One of which is the Weber’s initiative which limits the number of second ‘newly-built’ homes in any given commune to 20%. Due to this limitation, there has been a greater demand for newly built holiday homes in ski resorts than the supply has been. Therefore the value of the newly-built properties is rising. The Weber’s initiative primarily affects real estate in ski resorts, where there is a vast majority of second homes. In larger cities (in which there are less second homes), there are almost no problems when acquiring a second home.
Village and ski resort Zermatt
– According to recent data, 80 % properties in the Alps are purchased for renting out. How much income can be earned from rental? Which months are the most profitable, and which ones are not?
– Depending of course on ski resort and again, the position within that particular ski resort, rental income will be around 6%. For example an apartment of €730,000 could have a rental income of over €40,000 per year. There is more demand for accommodation during ski season (when the ski slopes are open). Usually it is period from December until April. On the contrary, the least profitable period is from June until November. However there are ski resorts, such as the Aletsch Arena, Zermatt and Saas-Fee, which are also popular summer holiday destinations.
Summer in the mountains of Switzerland
– Maintenance of ski resort property: what are the expenses? What should be taken into consideration during the process of purchase and future use?
– The expenses regarding maintenance cost vary a lot, depending on the type of housing and the age of the house. New properties are usually built with the help of modern technology and high-quality building materials. Thanks to this fact there are almost no costs regarding both outside as inside maintenance of the building during the first 10 years. However the average amount of condominium costs for apartments in a larger residence are approximately 0.5% of the value of the property.
Mountain rack railway Gornergratbahn
– The Alps are large enough. What benefits of Switzerland can you name in opposition to France, Austria and Germany? What can you say to those potential buyers of ski resort property, who doubt about the choice of a country?
– Real estate in the Swiss ski resorts is expensive. Prices of apartments are around 30% higher than in France and more than double of those in Austria. For many buyers, however, investing in Swiss property is a safe long-term investment, thanks to the rock-solid economy. And because Switzerland is the country of the picture-postcard villages, clean mountain air, spectacular ski resorts and much more, the demand for holiday homes (acquisition and renting) will increase every year.
Ski resort Portes du Soleil
– What will happen in the real estate market in Switzerland in 2014?
– The forecast for Swiss real estate in 2014 is optimal, as the countries’ real estate market is probably the most solid one of Europe, and maybe even worldwide. With the changes and trends mentioned in the rest of this interview in mind, prices of properties will keep on rising steadily. The demand will keep on growing steadily while the supply will remain less.
– Do you think if there is a "bubble" on real estate market in Switzerland, as prices are inflated and continue to grow? How much do the legislative measures affect the development of prices in the country? And what can be results of it in the future?
– Other than in other countries in Europe, according to us there is no "bubble" in the Swiss Real Estate market. The legislative measures affect development of rising prices in a very safe manner. As a result, the existing home owners will have more valuable properties, and future buyers will be able to get more expensive and therefore more exclusive properties than today.
Text: Kirill Ozerov, ee24.com