Luxury real estate in Switzerland is still in demand – but momentum is slowing. And popular locations are losing ground. 

Just four years ago, Cologny near Geneva topped the list of Switzerland’s most expensive residential locations. Today, St. Moritz is ahead: anyone wanting to buy a luxury property here will pay at least CHF 43,000 per square meter – and that’s just the starting price. In prime locations, prices even exceed 100,000 Swiss francs: in other words, 100 million Swiss francs for a generous 1000 square meters of living space.

Just four years ago, Cologny near Geneva topped the list of Switzerland’s most expensive residential locations. Today, St. Moritz is ahead: anyone wanting to buy a luxury property here will pay at least CHF 43,000 per square meter – and that’s just the starting price. In prime locations, prices even exceed 100,000 Swiss francs: in other words, 100 million Swiss francs for a generous 1000 square meters of living space.

Only Aspen and Monaco beat Switzerland

Tourism regions can now also be found in the following places: Gstaad and Verbier occupy second and third place. Cologny has dropped to fourth place, according to UBS in its latest study on Swiss luxury real estate. The bank analyzes the most expensive 5 percent of apartments and properties in 28 municipalities with a “high proportion of luxury properties”.

Claude Ginesta, a real estate agent with offices in the greater Zurich area and Graubünden, sees the second-home initiative adopted in 2012 as the main reason for the postponement. The artificial restriction of the market is driving up prices. At the same time, the weaker development in commodities trading has slowed demand and thus the price increase in the Geneva region, writes UBS.

However, the trend that the most expensive properties are located in mountain regions is not just a Swiss phenomenon. According to UBS, three out of four of the world’s most expensive luxury destinations are now in the mountains. Aspen (66,000 dollars per square meter) has ousted Monaco (53,000 dollars) from the top spot. St. Moritz and Gstaad follow with 52,000 and 47,000 dollars per square meter in third and fourth place.

Due to the recent devaluation of the dollar, Verbier is now also one of the most expensive locations. At 44,000 dollars, it almost reaches the price level of Hong Kong (45,000 dollars).

Price growth has weakened

Despite these shifts, it is clear that the market in the luxury segment has lost momentum. According to new figures from UBS, prices in Switzerland only rose by an average of 1.2 percent in 2024. The entire owner-occupied housing market grew by 3.2 percent. The situation was similar in 2023: the luxury market grew by 2 percent, while the overall market grew more strongly. In 2021 and 2022, prices had risen by between 7 and almost 10 percent.

What is behind the cooling? UBS does not see a lack of interest as the cause. Rather, the restrained price momentum is a consequence of the exaggerations of previous years. Despite the weaker development in the last two years, the price level in the luxury segment is 27 percent higher than in 2019, and in Zug even 40 percent above the pre-corona level.

The high prices limit the circle of potential buyers. Condominiums in the mid-single-digit million range are particularly affected. Here, the affordability guidelines for mortgages have a greater impact than for villas in the double-digit million range, which only the ultra-rich can afford anyway.

Uncertainty due to inheritance tax initiative

Ginesta also observed something else: apart from St. Moritz, Zug and Gstaad, there were significantly fewer transactions in the luxury segment. One reason for this is the strong franc, which is making real estate purchases more expensive for foreigners. In addition, many foreign buyers have problems with exit taxes in their home countries.

Another braking factor is the planned popular initiative for an inheritance tax, which is to be put to the vote in 2026. It calls for a tax of 50 percent on assets in excess of CHF 50 million and should apply immediately upon adoption. Around 2500 people would be affected, including many company owners. The uncertainty only decreased when the Federal Council signaled at the end of 2024 that it would reject the initiative without a counter-proposal and considered its de facto pre-emptive effect to be questionable in terms of state policy.

Outlook remains gloomy

Nevertheless, prices continued to rise. According to UBS, this is due to mortgage interest rates, which have fallen again, and the good stock market performance in 2024. The number of people with assets of at least CHF 50 million is likely to have grown at an above-average rate last year.

UBS again expects moderate price growth for the current year. Switzerland’s political stability continues to generate demand from abroad. Regions with a large international clientele – such as Geneva or Alpine destinations – are likely to benefit in particular. At the same time, economic uncertainties, such as the new US tariffs, are dampening asset growth and thus the willingness to buy.

Ginesta takes a similar view: “The lower interest rates will support the Swiss real estate market this year. However, economic development and the stock market environment are also important. “The real estate market always moves in line with developments on the stock markets,” says Ginesta. And how things will continue there is highly uncertain despite the current calm.