Engadiner Post:" At the end of April, in the middle of the Corona pandemic, the EP/PL conducted a survey on the Engadiner property market. Various experts assessed the situation in the Engadin as very stable at the time. What is the situation today?  

Sascha Ginesta: No change. Due to the Corona pandemic, we have felt little impact on the course of business. We've missed a few viewings. But demand has remained stable.

Uncertainties are high, both regarding a possible second corona wave and the bleak economic outlook. Why does the real estate market defy these per se negative omens?

The situation on the real estate market was very robust even before Corona. Even the pandemic has done little to change this, even though the long-term economic effects for the middle class or those on lower incomes are pervasive. Although the stock market has recovered in the meantime, the situation here still holds some uncertainties. At the same time, interest rates are still very low and appear to have stayed low for even longer. This stabilises the real estate market and makes investments in real estate still very attractive. Then the effects of the second home initiative must not be forgotten. There is no more construction, the supply of good new properties is declining, but the demand is still there. 

Could the Engadine benefit from the corona crisis in so far as residents from larger cities or agglomerations in particular secure a home here in the mountains as a refuge?

Yes, we are talking about the effect of de-urbanization. It is no longer only central locations in cities that are in demand, but second homes have also become much more important. We expect a strong market in this segment in the coming months. Whether this will have a direct impact on prices is difficult to say. The demand for good second homes will increase, not only in tourist areas. Specifically, we expect positive effects for the Upper Engadin in the short and medium term.

Are there any losers?

For the first homes, I would at least put a question mark. Due to the jobs that could be lost in tourism or retail business, demand is likely to decline. There will inevitably be a correction in commercial properties, i.e. in retail and office space or in the restaurant business.

Have you granted discounts because of Corona?

No, never. Not only in the Upper Engadine, but throughout Switzerland we were able to maintain prices due to strong demand. Not a single buyer bailed out on us, even during the lockdown period.

Some apartment owners, especially from Italy, have also been hostile because they have stayed in Engadin. Have you noticed any of this?

I learned about this from the media and from conversations with people I know. It was a topic at Easter, but today nobody talks to me about it anymore. Perhaps it is also because there is now a certain understanding of the FOPH's protective measures, which in those uncertain times were mainly aimed at ensuring health care. But I also understand, of course, that people who own a second home were happy for a change of scenery, especially during the lockdown, and were happy to go to their apartment in the Engadin. 

The Upper Engadine in particular has been a hotspot for many years in terms of property prices, comparable to regions such as Geneva. Will this change in the near or distant future?

This statement is basically correct. But something is often forgotten: The real estate market has come under a lot of pressure in the last eight years. There was the second home initiative, the white money strategy, then came the Euro shock, and we had two winters with practically no snow. The average property price in the Upper Engadine has fallen by 30 percent compared to 2011, so the correction has already taken place. Prices have been bottoming out for a year and a half now and, as I said, we expect prices to rise again.

On a portal I found a 3.5-room apartment in Celerina with 100 m2 gross floor area (GFA), built in 2003, not in a top location. Would you pay CHF 1.4 million for it?

Without knowing the details, an answer is difficult. It is important to distinguish between offer and transaction prices, especially in resale. There are often advertisements from private individuals or brokers that have hardly any serious price estimate as a basis and are therefore too high. Whatever offers can be seen on the Internet has often been on the site for some time. But for Celerina I can say that you pay between 15000 and 20000 francs per square meter GFA for a new apartment. For a good 15-year-old apartment in good condition in an average location, a price per square metre of 10,000 to 15,000 francs is realistic. But it is important that each property is assessed individually.

On the portal of your company there are still condominiums of the "Pro Vivaint" development advertised for sale. The year of construction was 2012, the apartments have never been occupied. What's wrong here?

This development has a long history. The apartments have sold very well until 2012 as planned. About half were sold, then came the real estate crisis in Engadin. Two years ago, when we took over the marketing, the prices were reset. With the result that we were able to sell eight apartments in the past one and a half years, at prices 20 to 25 percent lower than in 2012. Now the market is playing for us, the demand is there. But it took a clean analysis and repositioning to find a buyer again. To make matters worse, it is not necessarily a typical two-home product. "Pro Vivaint" is urban in style. Centrally located, practically built. Great for the locals, but less for the holidaymaker looking for something in the Engadine style with the typical Arven living room.

How do you assess the situation on the market for first homes, is there enough affordable housing for locals?

We do not rent out first homes ourselves. So I can't speak from personal experience. But if I include the analysis of the real estate company Wüest Partner, I see that the vacancy rate in the Engadin is not very high. In the Engadin, there is no classic rental housing development in any case. Apartments for locals often came onto the market as rental properties because they couldn't be sold, or one rented out such an apartment in a superstructure. There are very few whole developments with rented flats like elsewhere. It should be added that building in the region is quite expensive, and there are hardly any attractive returns for institutional or large investors. Nevertheless, I am personally convinced that there are probably still a few good rental apartments for locals in attractive locations on the market. Especially for families.

You have already mentioned the Second Residence Act. This has been in force for almost five years. How has it changed the real estate market?

It was always clear that there would be a shortage of supply. The question was only when the demand could no longer be met. This has now happened a good seven years after the adoption of the second home initiative. After the initiative was adopted and before the law came into force, there was a great deal of uncertainty. Then came the real estate crisis with the price correction that was necessary to bring the market back into balance. We have been experiencing a strong buyer's market again for a good year now.

Just recently, a federal court decision has become known, which insists on a strict interpretation of the law with regard to old-law apartments. How do you judge this?

There will be even less living space on the market. All the old-law buildings that could have been demolished and rebuilt lack the 30 percent expansion option.

At the end: If I had the necessary change: would you advise me on a real estate investment in the Engadine?

Yes, in the long term this is certainly interesting, especially if you would otherwise have to rent. But it's the location that matters...

...because of the view, the good accessibility or the nearby shopping facilities and the connection to public transport?

Sunny, a good view, lots of privacy and tranquillity are factors that are in great demand today. Added to this is the proximity to the ski area, keyword ski-in, ski-out. Then, however, individual topics can also decide, such as public transport connections or shopping facilities. In the first home area, public transport, infrastructure or proximity to the school are important factors. In the case of second homes, the beautiful view, the peace and quiet and the proximity to the skiing area are much more decisive.

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