ALPINE MARKET TRENDS

July 2008

A survey in last Saturday’s Telegraph showed that purchase price, a strong rental market and ideal holiday location are very important considerations for buyers when choosing an overseas property. But do the same factors count for buyers of alpine property?

With concerns about climate change, snow-surety is the first question asked by savvy investors. This is reflected by the demand for property in high-altitude resorts such as Chamonix and Tignes in France and Verbier and Les Diablerets in Switzerland. The downside of a good snow record is higher property prices.

Ski-in/ski-out property also attracts a price premium. Yet while ski convenience used to be a major factor, research shows that some buyers are choosing to locate in a satellite village in easy reach of a few ski resorts and so a range of snow conditions. The trend is apparent in the Arve valley in France: buyers are attracted here by the varied range of well-priced property and closeness to all of Megeve, Chamonix and Les Contamines.

Year-round appeal is an increasingly important factor for buyers. Ski property offers a healthy rental return in the winter, just when most buyers want to use their property. The summer months have been quieter historically. Interest in mountain summer sports, such as mountain biking, hiking and climbing. More and more buyers are opting for a location with an established summer season, to improve their rental return and extend their own use of their property.

The growth of low-cost flights has made it easy for owners to get to their alpine property, especially with routes to smaller airports such as Grenoble and Chambery. Spiralling oil costs could see Fewer snow-bound flights - Ryanair has already announced the reduction in its winter service. Where the airports lose out, the train companies should win. The Snow Train and Eurostar offer winter services to the Tarentaise area, providing an alternative travel option to home-owners in the Trois Vallees, Paradiski and Espace Killy ski areas.

For HNWI a unique property features is the major influence when looking for a second home in the snow. Many buyers look for the property 'X factor' whether it is a chalet designed by a leading architect or an eco development.

The last few years have seen the explosion of leaseback property in the French Alps. Viewed as the hassle-free way to own a ski apartment, the jury is still out on whether they live up to their promise as investment properties, not least because of the challenges of rentals outside the winter months. A few developers have recently announced proposals for hotel apartment complexes in Switzerland, such as the Maisons de Biarritz project in Champery, Valais, Switzerland. Seen as giving greater protection to investors and being beneficial to the local community, uptake is expected to be be high.