by THO
Year after year, rents in Davos hit the roof, especially during the World Economic Forum meet as most property owners try to capitalize on the annual event.
While all rooms are ‘sold out’ during the ongoing event, weekly rentals quoted by AirBnB a few days back ranged from ₹7.98 lakh for a studio apartment with a kitchenette, ₹68 lakh for a two bedroom apartment, ₹26 lakh for a one bedroom apartment and ₹18.96 lakh for a bed in a showroom with no shower. Rents were higher for properties located close to the convention centre. A lodge was reportedly rented for ₹3.78 crore during the event. The same property normally rents for ₹44 lakh a week.
The 54th annual meeting of the World Economic Forum (WEF) is being held from January 15 to January 19 in Davos, Switzerland at the local Swiss Alpine School in the center of city. It has welcomed more than 100 governments, major international organizations, 1,000 forum’s partners, as well as civil society leaders, social entrepreneurs, and media representatives.
Also Read: Davos World Economic Forum meeting 2024 : List of ministers and VVIPs set to represent India
Of Vibrant Gujarat and Dubai Expo
Real estate experts say that one can at best compare this global annual meeting to the Vibrant Gujarat Summit back home and the Expo 2020 Dubai (that was held for more than 100 days).
They said that the impact in Gujarat was felt directly on hotel rentals rather than residential properties. Most of the big hotels in Gandhinagar and Ahmedabad commanded rentals that were 3X to 10 X more than the regular rack rates. Some five star hotel properties commanded anything from ₹15000 to ₹50000 per key compared to regular prices of ₹5000 to ₹10000 per key.|
Also Read: Vibrant Gujarat Summit: Exclusive vegetarian thali for guests over 3 days
In the case of Dubai’s property market, rates for short term rentals had shot up, especially for properties located closer to the Expo venue, say property experts.
Swiss news websites such as Swentr.site attribute the trend of increasing rentals during the Summit to the economic principle of supply and demand mismatch. Other websites term the high rentals during the WEF event as an annual ‘spectacle of the absurd.’
Numerous houses are exclusively offered for the duration of the WEF and local media reports say many housing units are kept vacant for most part of the year as landlords earn much more within this week than what they earn through regular rentals throughout the year.
According to a local newspaper NZZ’s website, the demand for accommodations during the WEF has seen rental prices reach exorbitant levels. Shop owners are reportedly charging between ₹1.66 crore to ₹2.49 crore per week for their spaces. Even the most affordable Airbnb room, with a shared bathroom, is listed at ₹1.34 lakh.
The local website also mentioned that companies and government organizations from around the world have taken over bakeries, bookstores and opticians’ offices. During the WEF, these serve both as temporary offices and advertising platforms. Some residents have also vacated their homes to make room for the thousands of guests for whom there aren’t enough hotel rooms, the media report said.
How ski resorts fare in terms of property rankings
Knight Frank’s Ski Property Index reveals that Swiss resorts lead the rankings for the second year running, with three German-speaking resorts – Klosters (16%), Davos (13%), and Andermatt (9%), occupying the top spots. A severe lack of stock and infrastructure improvements in each resort are pushing prices higher.
According to Wikipedia, Davos is an Alpine resort town and a municipality in the Prättigau/Davos Region in the canton of Graubünden, Switzerland. It has a permanent population of 10,832 (2020).
According to an article by JLL titled Facts About the Housing Market in Switzerland, in 2021, two thirds (67%) of residential buildings in Switzerland belonged to private individuals, with legal entities owning around one in ten buildings (12%). 41% of these were companies active in construction or real estate. 14% of the buildings were owned by communities (simple societies, communities of heirs, communities of property, communities of municipalities).
It observed that Switzerland is a country of tenants. At the end of 2021, there were 2.4 million tenant households and 1.4 owner-occupier households. The urban cantons Basel-Stadt (83%) and Geneva (78%) had the highest proportion of rented dwellings whereas the cantons Appenzell Innerhoden (38%) and Valais (40%) had the lowest. Tenant households were primarily single-person households (45%) or couple households with or without children (44%). These two household types correspond to 37% and 54% of all households, respectively.
Regardless of size, the average net rent in 2021 was CHF 1,393 ( ₹1.34 lakh) at national level. The highest rents were found in the cantons of Zug, Zurich and Schwyz. The cheapest cantons are Jura, Neuchâtel and Valais. In general, it can be observed that the longer households rent their dwellings, the lower the rents.
New dwellings, i.e., those built less than two years ago, are the most expensive. For older dwellings, leases concluded less than two years ago are at clearly lower levels. For example, a new four-room apartment has an average rent of CHF 2,112, ( ₹2.03 lakh) while older four-room apartments have an average rent of CHF 1,700 ( ₹1.63 lakh), the article noted.
It noted that more than a third (39%) of buildings were built in the past 40 years, i.e. after 1980. Whereas 45% of single-family houses have been built since 1981, only 37% of multi-family buildings were built after this year and 20% of buildings in other categories (buildings not for solely residential purposes).
