Real Estate, Property and Holiday Apartments · St. Moritz - Engadine

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Real Estate report "Second Homes & Vacation Homes in Switzerland"

Second homes, vacation houses and apartments are very popular in St. Moritz and the Upper Engadine (Switzerland). At the beginning of June 2005, the citizens of the Upper Engadine (one of the most important and attractive holiday destinations in Switzerland) applied the brakes in the face of trends in the vacation-home market. An initiative to restrict the number of holiday homes built in the Upper Engadine in the future to a gross floor area of 12,000 square meters per year (approximately 100 apartments) was approved by a clear majority. Compared to current figures, the number of new vacation homes built in and around St. Moritz will therefore be reduced by a quarter.

The biggest price rises have been seen in the Upper Engadine. Between 1995 and 2005, price increases for owner-occupied apartments in Saint Moritz, Celerina or Silvaplana have been 42.5% higher than the Swiss average. In Pontresina, prices have climbed even faster. Nowadays, high-quality owner-occupied apartments in St. Moritz are priced at around CHF 10,000 per square meter –a perfectly "normal" price which is comparable to those in the city of Zurich. In the luxury category, prices of CHF 25,000 per square meter are quite commonplace.

Supply restrictions, such as the planned measures to rectify the situation in the Upper Engadine, are likely to exert further upward pressure on prices in this region over the next few years. However, we are unlikely to see any major movements in vacation property prices in the majority of Switzerland's favored locations for second homes. Instead, prices are expected to develop in line with the Swiss average in most regions.

Source: Credit Suisse