In Austria, a Rare Offering of Ski Resort Homes
New-build apartments and chalets in Lech and Obergurgl, two of Austria's most exclusive Alpine holiday resorts, are available for sale, a rarity in the Austrian market.
In many parts of the Alps, the property is owned by a small number of families who control the local council and often own the ski lifts, too. They keep the land within their own hands and it is unusual for property to made available for sale on the open market.
In addition, several regions of Austria have severe zoning rules and planning requirements that restrict the number of holiday homes - those not the owner's primary residence -- available to purchase. In mountain villages like Kitzbuhel, for example, it is extremely rare for any homes to come on to the market.
Lech in the Vorarlberg area of western Austria is a resort where the mountains and ski lifts are controlled by a small group of local families. In December this year the first of four luxury modern stone and wood chalets on the site of a former family-run hotel will be completed priced from €5.8 million.
Similarly in the Tyrolean resort of Obergurgl, one hour from Innsbruck airport, fourteen apartments priced from €600,000 are the first new-build properties to be offered for sale in over a decade, says Jessica Delaney of Alpine Marketing.
"Both Lech and Obergurgl are beautiful and popular resorts where it has been almost impossible to buy properties before," says Delaney. "As with most holiday homes in Austria owners of these new properties are obliged to rent them out when they are not using them. This is to avoid the problem of 'cold beds' where owners lock up and leave their homes and resorts become too quiet."
The Austrian property market has proved to be Europe's most resilient over the past five years according to new industry figures. While rules on second home ownership and restrictions on foreign buyers complicate property purchases, prices in Austria have increased by 34.7 per cent since 2008, according to Knight Frank Residential Research, ahead of Norway (34.4 per cent) Switzerland (26.5 per cent) and Germany (12 per cent).
The property market has outperformed all European nations since the collapse of Lehman Brothers, according to Knight Frank.
This success is due to a number of factors, including a shortage of supply combined with strong local and international demand. Strict planning rules mean there is a shortage of homes, especially in Vienna and prime Alpine resorts. But demand remains strong, especially from Germans, Russians and Eastern Europeans who appreciate the financial and political security Austria provides, while Vienna is attractive as a tourist center and is home to organizations including OPEC, United Nations and General Motors.
The Austrian economy avoided the boom and bust in the past decade and the economy slipped into recession only briefly in 2009. Despite sluggish growth below 1 per cent in 2012-13 both Bank of Austria and the Austrian Institute of Economic Research predict growth of 1.6 to 1.8 per cent in 2014.
"Austria ski resorts have always represented good value compared with the French and Swiss Alps both for property and for cost of living but it is a much younger marketplace," Delaney said. "The Austrian Alps did not experience the steep price rises seen in the French and Swiss Alps pre-2007."
Less than 20 years ago property could not be owned by most non-Austrian buyers. Since 1995 when Austria joined the European Union, EU residents are permitted to buy and live permanently in any property. Rules for non-EU residents and for purchasers of all holiday homes are set by each of the country's nine self-governing federal provinces.
Non-EU residents can buy in six of these nine provinces. They must apply to the local council, the Grundverkehrsbehörde, for a foreigner purchase permit once the sale is agreed, a process that is normally straightforward says Delaney.