Davos Apartment Prices Are Falling, But Not for January Rentals

The financiers and captains of industry paying premium prices to bed down in Davos in January may not notice, but apartments in the Swiss town that hosts the annual meeting of the World Economic Forum are starting to look like a bargain.

Prices for holiday homes have dropped as much as 15 percent in the past three years, according to Swiss bank UBS. Supply is up because of a building boom, while a strong Swiss franc is damping demand from foreigners. The franc gained 9 percent against the euro in the past year, spurring those in the market for a second home to consider luxury properties in France or Austria instead. “It’s very unpleasant being a property investor in Davos at the moment,” says UBS analyst Matthias Holzhey, who says he expects prices to fall an additional 5 percent in 2016. “A strong franc is poison. We’ve lost most of the foreign buyers.”