Demand for holiday properties in Alpine regions at an all-time high

Since the start of the pandemic, many people have experienced a further increased longing to lead a peaceful life closer to nature. More and more prospective buyers are turning their attention to real estate amid the idyllic mountain scenery of regions in the Alps. In sought-after locations in Switzerland, Austria and Germany, demand far exceeds the limited supply of homes, and this is reflected in high prices. Last year, for example, buyers in Gstaad paid between the equivalent of 14 and 36 million euros for a chalet in a prime location, while luxury apartments commanded prices of between approx. 29,000 and 62,000 euros per square metre. “Large detached chalets in hillside locations or with a mountain panorama are especially sought after. Properties of this special calibre very rarely come onto the market though,” says Suzana Bušić, Partner at Engel & Völkers Gstaad.

Sharpest price rises are in Swiss ski regions

Due to the very limited availability of properties on the market, there was again a significant hike in prices in Alpine ski regions over the course of 2021. Engel & Völkers recorded the sharpest price rise during the 2021/2022 winter season in Swiss ski regions including St. Moritz. While in the first year of the pandemic, Engel & Völkers recorded prices of between 52 and 62 million euros in prime locations, between the equivalent of 57 and 72 million euros were generated in this segment in 2021. Absolutely exceptional properties fetched prices of as much as 172 million euros. For apartments in prime locations, prices reached between the equivalent of 38,000 and 48,000 euros compared to 33,000 to 43,000 euros per square metre in the previous year. But demand is also high in ski destinations with comparatively moderate prices. For example, prices for chalets in very good locations in Saas-Fee were between the equivalent of 1.7 and 4.5 million euros (2020: approx. 1.5 to 4.1 million euros). In 2020, the prices for luxury flats in prime locations were between the equivalent of 10,000 and 14,500 euros per square metre, while last year, these rose to the equivalent of 11,000 to 15,700 euros per square metre. "In many cases, new ski properties can no longer be built, which makes them a limited and therefore highly sought-after commodity," explains Jan Christmann, Licence Partner at Engel & Völkers Davos and Chur in Switzerland.

Call of the mountains extends through summer: line blurs between first and second homes

One trend that has intensified since the outbreak of the Covid-19 pandemic is the use of ski properties as a year-round residence. The boundary between primary residences and second homes is blurring, as the emergence of remote working means that, in many cases, people are spending far more time in their former holiday property. “The significant increase in flexibility that has come about as a result, through remote working, has seen buyers start looking for more space and privacy. The demand for property in the mountains has risen strongly as a result,” says Jan Christmann. Engel & Völkers also recorded a significant growth in prices in top locations in Austria in 2021. In Zell am See, prices for chalets in very good locations reached between 1.5 and 2 million euros (2020: 1.3 to 1.8 million euros), while apartments commanded between 6,000 and 9,000 euros per square metre (2020: 5,500 to 8,500 euros). Price increases were also registered in the ski regions of Tyrol. In Seefeld, for example, prices for chalets rose to between 1.4 and 1.8 million euros (2020: 1.35 to 1.75 million euros). Luxury apartments changed hands for 6,000 to 7,000 euros per square metre (2020: 5,500 to 6,500 euros). Kitzbühel continues to enjoy a special status. Chalets in prime locations here commanded prices of between 5 and 24 million euros (2020: 4 to 20 million euros), while prices per square metre for luxury apartments reached between 19,000 and 23,000 euros, as in the previous year.

In order to remain attractive during the summer months, ski destinations are adapting what they have to offer to meet the changing needs, and are providing a wide variety of leisure and recreational opportunities during the warmer months of the year too. This ranges from sporting activities such as hiking, golfing and cycling, through to culinary offerings and cultural events such as the “Klassik in den Alpen” event in Kitzbühel. German regions such as Garmisch-Partenkirchen and Oberstdorf are also ideal for combining winter and summer pursuits. This is in line with the current trend, and is leading to rising property prices. In Garmisch-Partenkirchen, buyers paid between 2.5 and 6 million euros for ski properties in very good locations (2020: 2 to 5 million euros), and between 2 and 4 million euros in Oberstdorf (2020: 1.2 to 2.75 million euros). Luxury apartments reached prices per square metre of between 8,000 and 13,000 euros (2020: 7,000 to 10,000 euros) in the best locations in Garmisch-Partenkirchen, and between 6,000 and 8,000 euros (2020: 4,000 to 7,500 euros) in Oberstdorf.

Outlook: Exceptional prices are becoming increasingly frequent

As the requirements sought from a ski property evolve, buyers are now no longer simply looking for destinations that offer ideal skiing conditions. They are also seeking a diverse range of opportunities and amenities in place when it comes to dining out, year-round leisure pursuits, wellness, nature and culture. Due to the shortage of properties on the market, Engel & Völkers expects prices to continue to rise in the Alpine regions. “We are seeing, more and more frequently, that prices are being paid that far exceed the standard market price bracket for truly exceptional properties. This kind of property might offer a special heritage, an exceptional location with a great deal of privacy, and unobstructed views of the surrounding mountains,” says Barbara Jost-Derksen, Licence Partner of Engel & Völkers St. Moritz.