Alpine Luxury Resort Property Markets on the Mend
Weaker Euro Poses Buying Opportunity
According to Savills's Spotlight on the Alpine Property Market Report,
the recovery in the Alpine real estate market, led by the ultra-prime resorts, has spread to the rest of the region with infrastructure investment spurring new development. British buyers are returning as a weak euro poses buying opportunities in France, Austria and Italy.
Courchevel 1850 tops the Savills Ultra-Prime Ski Resorts Index with typical prices of €31,340 per sqm for the best properties. The French resort is followed by the premier Swiss destinations of Gstaad, St Moritz, Zermatt and Verbier at between €26,450 and €31,220 per sqm. In spite of limited price growth, a strong Swiss franc has pushed these markets up the rankings in currency terms.
In North America, only Vail is on par with the top European competition at €25,200 per sqm. Key Alpine market highlights include:
- Courchevel 1850 and Gstaad continue to lead the Ultra Prime Ski Resort Index
- A strong Swiss Franc has made Swiss property expensive to foreign buyers. However, a weaker euro poses buying opportunities in France, Austria and Italy
- Resorts need to adapt and broaden their appeal to wider markets, if their value is to be maintained
- 92% of buyers purchase for both own use and investment
Paul Tostevin, associate director, Savills World Research, said, "A home in a top-tier Alpine resort is a key component of global property portfolios for the world's wealthy. A property in Courchevel 1850, Gstaad or St Moritz complements a city residence in London, Paris or Moscow."
Jeremy Rollason, managing director, Alpine Homes, in association with Savills, said, "2015 has been a tale of two currencies for UK buyers in the Alps. The de-peg of the Swiss franc caught markets off guard, but sterling has since recovered and now trades within a 5% range of the pre-January 2015 exchange rate. The weakening euro has helped buyers in euro denominated countries. Currency swings have the effect of either suppressing or stimulating markets through affordability, but the net effect has little influence on property values per se." Switzerland
Buying activity in the Swiss resorts cooled in 2015 with foreign buyers, particularly important to the top end of the market, impacted by the strong Swiss Franc. However, despite limited supply of second homes, investment in infrastructure continues and the cache of Swiss resorts remains.
Grimentz gained a new lift in the 2014/520105 season linking to neighbouring Zinal and new apartment schemes have followed. La Tzoumaz is also set for revival thanks to a planned lift upgrade, improving connectivity with neighbouring Verbier.
Villars, a year round resort with high quality international schools, has seen high levels of new supply in recent years and has suffered from poor snowfall. This has had some impact on pricing and, for those who shop around, there are deals to be done. Prime apartments here trade at between CHF10,000 (€9,000) and CHF12,000 (€11,000) per sqm. Austria
The Austrian Alpine resort market has remained strong on the back of a vibrant local economy, which has generated house price growth nationally of 41% since 2008.
Austria continues to offer excellent value for money compared to the more established French and Swiss resorts. Committed investment in resort infrastructure and investor appetite means there is still room for upward price movement.
Many Austrian resorts are dual season. Zell am See property prices continue to rise due to high demand and low supply, yet still represent value for money. Prices here range from €5,000 to €7,000 per sqm and a planned lift linking Zell am See to neighbouring Saalbach will only serve to increase its appeal. France
Sales volumes in the ski regions of Haute-Savoie and Savoie have held up better than the rest of France whilst a weaker euro has opened up investment opportunities for dollar and sterling denominated buyers.
Val d'Isere has seen premium restaurants and boutiques open. Popular with the UK market, there is strong rental potential with yields of circa 3.5% gross achievable for top chalets.
The Chamonix Valley continues to see demand led recovery and prices are now at or around the pre-crisis peak of €10,000 per sqm.
"We anticipate a continued globalisation of Europe's top ski resorts as the customer base broadens and attracts a more diverse and market savvy investor," concludes Rollason Beyond the Alps
US and Canadian ski resorts are spread across three major mountain ranges, a geographic area ten times the size of the Alps. Vail and Whistler are resorts of worldwide renown, but both are reliant mainly on domestic buyers. Prices remain below their 2007 high.
Top-tier US resorts do offer potential, as Tostevin notes: "The US is home to the largest number of wealthy individuals globally, so with the right product there remains a ready demand base to tap in the home market."
The report identified five emerging destinations and resorts opening up to an international market. The Balkans, on the edge of the large European market, and already attract British and Russian skiers. Pyeongchang, South Korea, is the 2018 host for the Winter Olympics. International investors have been attracted by special visa investor programmes.
Japan's Niseko has an established luxury residential market, supported by those from China, Singapore, Malaysia and Korea, as well as domestic demand.