Knight Frank 2016 Alpine Property Report Re-Cap
Autumn leaves and alpine property reports… In the ski property calendar, it’s the time of year for conclusions on the ski property market over the last 12 months and predictions for the year to come. International property giants Knight Frank are first up with their annual Alpine Property Report looking at the premium ski resorts across Europe and North America. So what has Knight Frank seen in the ski property market in 2016?
Despite economic uncertainties, Knight Frank concludes ski homes continue to remain a staple of global property portfolios. The logistics of building in the mountains means that only a finite number of houses can be built, and each new development becomes more expensive as land becomes more scarce. Despite these challenges, and in some ways even because of them, they conclude that the appeal of owning a ski property is strengthened among the wealthy.
• Unlike previous years where French ski resorts dominated the top half of the rankings and Swiss alpine options the lower half, there is no clear division between the two major alpine regions this year. This is surprising considering the strength of the Swiss Franc and restrictions on foreign buyers.
• Gstaad leads the 2016 Alpine Property Index with a 13% price increase due to a significant lack of properties, though generally, buyers are looking to better value ski resorts such as Chamonix and St Gervais Les Bains in the French Alps.
• As much as 94% of buyers plan to rent out their ski chalet to cover costs and finance personal trips. Consequently, continual investment in ski resort infrastructure is crucial in the decision-making process for a buyer as it is a valuable indicator of future tourist demand and long-term liquidity.
• Aspen’s luxury market is polarised: below US$5m the market is active while over US$8m the market has slowed significantly. In 2014, Aspen had one of the fastest growing luxury markets with a 20.7% growth.
• Knight Frank will be in increase in the prevalence of Aparthotels as developers in Switzerland look for ways to accommodate Lex Weber’s second home cap.
Where Should You Buy?
The Report gives some pointers, as long as you have a cool €1million or more to spend. Buying a ski property purely for personal use is all but a thing of the past, and renting is now the norm, even in the super-luxury (€10m+) market. Travel times are crucial, and ski resorts sitting at a higher altitude have a longer ski season enabling longer rental periods. The biggest trend is the correlation between investment in infrastructure and non-skiing related activities reflecting the tourist demand, such as in Chamonix and Val d’Isere.
Buying in a ski resort with an established summer season also increases the rentability of property. Geneva and Lyon airports have higher passenger numbers in summer than winter, and Chamonix is credited with over 2 million overnight summer stays.
The ski resorts in the USA, whilst attracting 55m visits in the winter also attract more visitors in summer with many Colorado resorts increasing investments in their non-skiing and summer activities.
What’s The Outlook for the Ski Property Market?
Knight Frank expects that most ski resorts will see marginal price movements over the next year. Switzerland may be the exception to this rule as in many ski resorts the property market is severely restrained due to the second home cap and purchasing rules for non-residents. New-build ski apartment developments in France are likely to command a premium given the lack of buildable land, but are attractive investments due to the VAT rebate.
The UK’s decision to leave the EU has not led to a significant market downturn, as sellers are not solely reliant on British demand. The index as a whole increased 1.8% this year, reversing the 1% decline seen in 2015.
- Guides to Swiss Ski Resorts for Ski Property Purchase
- Guides to French Ski Resorts for Ski Property Purchase