Due to rising mortgage interest rates: 5-star hotels are now cheaper than your own vacation home

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Anyone who buys a holiday home can now consider himself strictly upper class. According to UBS Alpine Property Focus, the annual cost of a second home in the Swiss mountains is around CHF 50,000. This is the amount for maintenance, imputed rental value and capital costs for a property with a purchase price of one million francs. Provided the buyer buys the flat at a mortgage interest rate of around three percent. High costs may encourage owners to sell.

Vacationing in your own holiday apartment is an absolute luxury. This is especially evident when costs are divided by a holiday week. Holiday apartments are occupied on average eleven weeks a year. This means that homeowners paid 4545 francs for seven days, or almost 760 francs per night. You can sleep cheaper in most 5-star hotels in the country. “Owning your own vacation home is less attractive than a hotel vacation,” says UBS economist Maciej Skoczek, 36.

costs doubled

Just two years ago, a comparable holiday flat cost half as much as CHF 25,000 per year. In addition to significantly cheaper mortgages, the opportunity costs of equity were also lower back then. The money has yielded almost no returns on relatively safe investments. But that was once. Skoczek calculates that “everyone who invests the necessary capital of 400,000 francs in the bond market earns 7,000 francs a year.”

In terms of services and offers, your own holiday apartment lags behind a 5-star hotel: Hotel guests enjoy the spa area, breakfast buffet and room service.

Every tenth flat is rented

For many vacation home owners, the actual weekly costs are much higher: If you don’t rent, you hardly use your home for eleven weeks a year unless you retire. Realistically, if you spent four weeks a year in a second house, a week would already cost 12,500 francs.

The cost of a vacation home can be reduced by renting it out: UBS estimates that about one in ten vacation homes in tourist destinations are offered on internet platforms. Average price: 230 francs per night. As an income feature, holiday apartments provide an average return of 3.8 percent. “However, returns are lower in many destinations with high square meter prices, such as Engelberg, Flims-Laax or Engadin,” says Skoczek. An investment of less than two percent becomes a loss-making business.

Source :Blick