Prime ski resort property prices rising again, latest index shows
|Wednesday, 28 November 2012|
The price of prime ski property has been falling in most resorts apart from those in Switzerland but prices are expected to start rising again.
The global financial crisis has dented confidence in this sector of the market. Overall prices worldwide are down 9.1% since their peak in the third quarter of 2008.
The latest Prime Ski Property Index from Knight Frank shows that prices are rising again, up by 1.5% in the three months to the end of June 2012.
The index has largely plateaued since 2010 with prices remaining static or rising marginally in the best resorts due to tight supply.
The exception has been resorts in Switzerland. In Zermatt prices increased by 18% from June 2011 to June 2012. In Gstaad prices are up 13.2% over the same 12 month period, up 8.8% in Verbier and up 5.6% in Davos.
Many resorts have seen prices remain static including Courcheval in France, Aspen in the United States and Revelstoke in Canada over the same 12 month period. Whistler in Canada saw prices fall 13%, in South Lake Tahoe in the US they fell 12.5% and in Chamonix, France, they fell 10%.
But the second quarter figures show that prices evened out. From March 2012 to June 2012 prices remained static in Courcheval, Aspen, Revelstoke, and Chamonix as well as in Megeve, Meribel and Val dIsere in France and in Cortina in Italy.
Over the quarter Tellerude in the US saw the biggest quarterly rise at 17.8% while prices rose 3.3% in Verbier, 2.9% in Zermatt and Gstaad, 2.5% in South Lake Tahoe, 2% in Davos and 0.4% in St Moritz. Whistler was the only resort to see prices fall in the second quarter, down 9.4%.
Knight Frank believes that more wealthy buyers will look at buying in ski resorts this season but some may wait to see what is happening with property tax changes in Switzerland due to come into force in January 2013.
The report points out that the number of individuals worth US$100 million or more is expected to increase from 63,000 to 86,000 between 2011 and 2016. With property high on their list of preferred investment classes, demand for the worldҒs best ski homes is likely to strengthen.
A recent survey conducted by Knight Frank found 38% of ultra high net worth individuals (UHNWIs) in the US and Canada either own or would be interested in owning a ski home. The survey also found that 11% of both Latin American and Asian UHNWIs are interested in owning a ski property.
Indeed, mainland Chinese buyers are now evident in Whistler alongside the usual purchasers from Vancouver and Seattle. Brazilian and Australian buyers have been noted in Aspen, alongside UK and Canadian buyers.
The motive behind the purchase of a second home varies around the world but when it comes to ski homes, lifestyle and investment motives rank highly. Investors are interested in ski in/ski out homes which are easily rentable while lifestyle purchasers place higher value on views, accessibility and a resorts facilities.
According to Matthew Hodder-Williams, Knight FrankҒs French Alps expert, demand for prime property in Frances top ski resorts held firm in the 2011/12 season. Supply, particularly in the most exclusive resorts in Les Trois Vallҩes, remained tight.
The weakening Euro has had little impact on pricing or the volume of sales in the French Alps. British, French, Ukrainian and Swiss buyers have been active in 2012. We are gearing up for the 2012/2013 season and hoping for another record year of snow,ђ he said.
I expect prices and activity to mirror last season with four bedroom chalets attracting the most interest and the four resorts of Courchevel generating the highest levels of enquiries,ђ he added.
Although prices rose in many Swiss resorts in the year to June 2012 the majority of this growth occurred in late 2011 and he reckons this is because many Swiss resorts are now largely in limbo as clarification is sought on the impending second homes cap.
In March 2012 Swiss residents approved by referendum a new law, which aims to ban new secondary residences in Swiss municipalities where the level is already above 20%. The Swiss Cabinet has recently delayed the laws introduction from September 2012 to January 2013 and reports suggest large loopholes may be incorporated. Resort developments,
Sales activity is expected to recover from the current lows once the full legislation has been published but some foresee a surge of planning applications by developers in the interim.
With international demand a key driver of ski property markets, exchange rates can prove critical to demand flows. US vendors in Canada for example can now benefit from the strong Canadian dollar. A US resident that purchased a Canadian ski property between 1999 and 2006, could see a 30 to 45% profit due to the exchange rate alone if they were to sell today.
One trend all the resorts have in common is an increasing awareness of the need to market themselves as year round resorts. Investment in ski infrastructure remains a priority but the provision of conference facilities, summer sports, festivals and luxury retail brands is increasingly evident, the report also says.
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