Prices for luxury holiday apartments in Switzerland’s Alpine region continued to rise in 2024, driven by several unique factors, including a significant drop in mortgage rates and the nation’s allure to international buyers. These trends reflect a longstanding pattern in the country’s real estate market, which has seen property prices ascend consistently over the past few decades.
A recent study by the UBS Chief Investment Office (CIO) highlighted the ongoing appeal of Swiss real estate, particularly in the context of the global luxury market. Among the top five most expensive locations for holiday apartments in the Alpine region, all are situated in Switzerland. St. Moritz leads the pack with prices starting at an astounding 22,300 Swiss francs per square meter. Following closely are Verbier at 22,100 francs, Zermatt, Gstaad, and Andermatt, solidifying Switzerland’s reputation as a premium destination for luxury property seekers. The data, which reflects asking prices until the first quarter of 2025, does not clarify whether the properties are being used as primary or secondary residences, adding nuance to the analysis of demand trends.
In comparison, the price for luxury holiday apartments in the French ski resort town of Courchevel is significantly lower, at the equivalent of 17,900 francs per square meter. Meanwhile, Austria’s Kitzbühel and Italy’s Cortina d’Ampezzo offer more budget-friendly options, with prices at 13,900 francs and 11,800 francs per square meter, respectively.
According to UBS, the current trend in Alpine luxury properties is a result of the “high-altitude euphoria” that emerged following the travel restrictions and lockdowns imposed during the COVID-19 pandemic. These restrictions shifted demand toward holiday residences in scenic locations, spurred by remote work opportunities that allowed people greater flexibility in choosing where to live and vacation. Since 2020, the demand for holiday apartments across the Alpine region has surged, with prices increasing by an average of 30 percent—translating to an annual growth rate of about 5.5 percent. This inflation in property values has continued to persist despite rising financing costs stemming from post-pandemic interest rate hikes, which UBS notes have only marginally mitigated the price escalation.
The market showed signs of moderation in 2023, with an average price increase of 2.3 percent across analyzed prime destinations in the Alps. However, the regional variations are noteworthy: in France and Italy, property values surged by more than 4 percent, while Swiss prices climbed by a more modest 3 percent. Interestingly, Austria experienced a decline of 3 percent in holiday apartment prices, reflecting differing economic climates across the Alpine countries.
Looking ahead, Maciej Skoczek, a real estate economist at UBS CIO and chief author of the report, predicts a continued cooling of the market in the short term. The cautious economic outlook for Europe, combined with inflationary pressures on household purchasing power and elevated financing costs—especially outside Switzerland—indicates that acquiring secondary residences in the Alps could become increasingly challenging financially. This potential plateau in price growth raises questions about the sustainability of the current market dynamics, particularly for international buyers who have traditionally driven demand.
UBS has also released a detailed report focusing specifically on Swiss alpine properties, which is expected to resonate with the affluent clientele of the bank’s wealth management services. The analysis underscores how geopolitical uncertainties have reaffirmed the appeal of Swiss real estate as a safe investment destination for international buyers. The recent drop in mortgage rates further enhances this attractiveness, providing a conducive environment for property acquisition despite the broader economic context.
The limited supply of holiday apartments and new construction has contributed to maintaining high price levels. However, UBS points out that the elevated price points in regions such as Graubünden have led to a stabilization in demand, with buyer interest increasingly shifting toward more affordable areas.
Regulatory factors also play a significant role in the real estate landscape. Switzerland’s property market does not shy away from regulatory scrutiny—similar to that of the financial sector. Current regulations pose risks to property investments; in particular, UBS anticipates that the easing of the Secondary Residence Act in October 2024 could relax the current tight supply of holiday homes, leading to a rise in available properties. Early indicators show a 10 percent increase in building applications in major tourist destinations in the first quarter of 2025, marking the highest level of activity since 2017.
Conversely, potential legislative tightening might constrain demand. The Swiss Federal Council is contemplating stricter regulations, dubbed “Lex Koller,” which would limit property acquisitions by foreign nationals. Such moves could have a direct impact on the pool of prospective buyers, thereby dampening demand.
Additional challenges loom on the horizon as UBS has flagged fiscal burdens for property owners due to proposed changes to the taxation of imputed rent. The proposed abolishment of imputed rental value could prompt some cantons to impose a secondary residence tax in compensation for potential revenue losses. Coupled with the climate policy-driven proposals, such as the “Initiative for the Future,” the outlook for the luxury segment may grow increasingly complex in the coming years.
As the luxury property market in Switzerland navigates these evolving dynamics, stakeholders must remain vigilant. The interplay of demand, supply, regulatory landscapes, and economic indicators will not only shape property prices but also influence the long-term attractiveness of the Swiss Alpine region as a premier destination for luxury holiday living.