THE SWISS CHALET: MYTH AND REALITY

THE SWISS CHALET: MYTH AND REALITY

Close your eyes and think of Switzerland: what’s the first image that springs to your mind? If your visualization includes mountains dotted with little wooden houses, steep roofs covered in snow or red flowers hanging from wooden balconies, you are not alone. Indeed, ever since the early days of mountaineering in the late 19 th century, the link between chalets and Switzerland has become a fixture in our collective imagination. Why this would be so is less obvious, however, considering the increasingly fickle preferences of our time and age. In other words, what explains the enduring appeal of wooden houses on hillsides, what keeps the myth alive, decade after decade? It may well be a case of property escapism: chalets are not there to put a roof over your head or to be located handily for your morning commute. Rather, they are an aspirational purchase, the icing on the property cake, perfectly fulfilling the wish for a home away from home.

They are related to main residences the way a dessert is related to the main course. At the same time, owning a chalet, even a newly built one, feels like owning a slice of local architectural heritage. To prove this point, it’s worth comparing chalets in Engadin with those in the Berner Oberland, for instance: the former are strongly influenced by their proximity to Italy and are typically made of stone, adorned with elaborate wall paintings not too dissimilar from those found on ancient Roman villas, while the latter are mostly made of wood and proudly display their utilitarian agricultural origin.

“Chalets are related to main residences the way a dessert is related to the main course.”

What goes on inside is what matters most.

While the outward appearance of chalets harks back to the past, on the inside the pace of change is nothing short of frantic. Nowadays, chalet design is all about natural materials, visible stone details, untreated wood, cocooning, an abundance of dark hues, extra-large bathroom tiles made from local granite, floor-to-ceiling windows, light an airy living rooms, “invisible” kitchens, emaciated fireplaces, sleek interiors, understated elegance with a touchof minimalism. As recently as a couple of decades ago, chalets were built to look cozy to the point of being poky, with small windows, low ceilings, lots of visible utilitarian features, chunky fireplaces, wooden panels on the interior that looked like those found in a sauna, prominent kitchens, plenty of nooks and crannies as well as countless tiny terracotta tiles. To cut it short, within a few decades, what we think of when we utter the word “chalet” has changed. To this has to be added the progress made in insulation, heating efficiency and lighting technology.

Architectural Botox: what keeps a chalet appealing. For prospective buyers concerned about keeping the value of their chalet high from one generation to another, there are a few criteria to keep in mind. First of all is location. Given that a chalet is something aspirational, it ought to hold its value well if its location offers something that people can’t obtain in town, like proximity to the ski lifts, a view of snow-capped peaks, walking distance to the village, being in the middle of snowshoe and hiking trails, and so forth. These plus points are unlikely to go out of fashion. Having a ski-in or ski-out access to the slopes is another example of a timeless selling point that can compensate for many a deficit in other areas. The same applies to structural highlights like double-height ceilings, generous room proportions and amenities such as smartly placed garages and lifts. But broadly speaking, the most important determinant of a chalet’s enduring value is its ability to make people’s dreams come true. In this spirit, a place on the slopes or near the lift is a skier’s dream, a location next to the village that allows for car-free weekends is a pedestrian’s dream, a setting in the middle of fields and trails is a nature lover’s dream, a living room with an amazing view is everyone’s dream, and so on and so forth. If you put your hands on one of these elements, you should always be able to sell your chalet on to somebody who looks to buy into that particular dream.

Is it a luxury good? Is it an indulgence? Or does it make practical sense? According to Swiss mortgage providers, the financial solidity of a holiday home is considered to be a lot more doubtful than that of a main residence. That’s because in theory, even in case of the most terrible of all economic recessions, people would still need a place to live, but nobody needs a second home, therefore it’s assumed that its value could, in theory, go down to zero. That’s where I disagree. In spite of all the caveats surrounding non-essential secondary homes, I am convinced that, as long as you play your cards reasonably well, at the very least you should expect a chalet to hold on to its value. In fact, you could argue that if really some biblical catastrophe were to befall us, having access to an out-of-town location that you call your own could be a lifesaver. Coming to think of it, owning a chalet, far from being a non-essential indulgence, could well be an insurance against trouble in our cities.

As long as you manage to put your hands on a proposition that’s halfway desirable, even if you stop using it yourself, you can rent it out for the holiday season, producing a nice little income on the side, while keeping any potential capital appreciation. In conclusion, regardless of whether it’s a luxury to be able to afford one, it certainly doesn’t feature the economic profile of luxury goods: it isn’t pure consumption. Instead, it is a mix of consumption and investment that no “pure” luxury good has. Therefore, chalets may be many things, they may even be luxurious, but a luxury they are not.

ENRICO BORGER - Financial Writer

& Investment Specialist