Real estate: Careful planning when buying a vacation home

  • 1 year ago

Prices for vacation apartments in the Alpine region, particularly in Switzerland, rose by 7% last year. Top prices were achieved in Engadin/St. Moritz, Flims/Laax and Gstaad. This is reported by nnz.ch, which cites a study by the major bank UBS. This development can be attributed to the coronavirus pandemic and the second-home initiative, which has limited the number of properties and thus increased prices. The purchase prices for these vacation properties are currently around CHF 1 million, an increase on the CHF 750,000 in 2019.

During the pandemic, the demand for vacation homes was boosted by the possibility of hybrid working away from urban centers. In addition, the second-home initiative increased pressure on the market by reducing the amount of available real estate. However, despite these factors, UBS expects a possible end to the strong upward price trend due to normalization after the coronavirus crisis, rising mortgage rates and a change in demand.

Before buying a vacation home, potential buyers should consider a few factors. Financing a vacation property can be more difficult than financing a home, with higher equity requirements and stricter amortization terms. Ongoing costs, possible renovation requirements and tax implications should also be considered.

Source and further information: nzz.ch
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