Knight Frank Ski Property Report Overview 2017

With the Alps covering more than 80,000 square miles containing hundreds of ski resorts, the decision about where to buy is never a straightforward one. For the past 9 years, property guru’s Knight Frank have released a ski property report hoping to give prospective ski home buyers a bit more clarity about where they might want to invest in their dream ski home.

Key Findings

1. Investment in Infrastructure is Key.
   The ski market as we have always known it is changing, and ski resorts must evolve and adapt if they are going to keep attracting tourists, residents and investors. With ski visits following a downward trend, continual investment in resort infrastructure is vital in ensuring the future of ski-tourism demand and long-term liquidity in property. Despite falling visitor numbers, skiers have higher expectations when it comes to snow reliability and resorts who invest in snow cannons, improving lifts and adding more telecabines they are ensuring these expectations are met.  But it isn’t just on the hill that people want to see investment. With 25% of alpine visitors not hitting the slopes, investment in non-skiing related activities is necessary if a ski resort wants to attract visitors and buyers. Many resorts are now creating off-mountain leisure activities to cater to these clients, including indoor water parks, thermal spas, ice skating and cultural & educational experiences such as exhibitions and museums.
2. Chamonix is leading the Alpine Property Index with prime prices up 4.8%.
   Overtaking Gstaad and Val d’Isere to take the top spot in annual price growth rankings, Chamonix has become regarded as the most well-equipped year-round resort in the Alps. With prime prices increasing by nearly 5% the past two years in a row, it has bounded ahead of Val d’Isere and Gstaad who recorded annual price growths of 2.5% and 1.7% respectively. Chamonix’s consistent growth comes down one main factor – its high number of permanent residents. More permanent residents mean two things:
   a. More quality services and amenities such as healthcare, schools, transport and general overall investment in town infrastructure. 
   b. An established summer season and overall year-round resort as it offers better occupancy rates over the whole year. 
3. There are 2 distinct buyers - those seeking a dual season resort to maximise year-round rentals AND those targeting high-altitude resorts which offer reliable snowfall and longer ski season. 
   A ski home is primarily an aspirational purchase, and most prospective buyers are looking to rent out their ski chalet to cover costs and finance personal trips. As such, personal preference often becomes secondary to the overall rentability of the ski home. With 80% of Knight Frank buyers and 94% of buyers overall renting out their ski homes a highly rentable home is one of the most important aspects to consider. Dual season resorts mean occupancy rates are greater as you can rent out your property across the whole year maximising rental income. High altitude resorts have longer winter seasons, and good snow conditions are pretty much assured and thus have a greater appeal than low-altitude resorts which are not so snow-sure
4. Unlike previous years, Swiss resorts are showing a weaker price performance due to the strength of the Swiss Franc and restrictions on foreign buyers.
   The majority of Swiss resorts are sitting at the bottom of the Alpine Property Index this year. The strength of the Franc has slowed sales and reduced budgets of international buyers. Restrictions on foreign buyers in conjunction with the Lex Weber policy which restricts the number of second homes available to 20% has prompted some hesitancy, particularly as many homes in popular ski resorts have already reached the 20% threshold, limiting the buying potential. Overall, Swiss resorts had a 5% decline over the last year.

What is the Overall Outlook for the Ski Property Market?

The demand of buyers is changing and though the draw of the mountains is stronger than ever, it is not just the snow that is attracting them. Investment in infrastructure and facilities are key to attracting buyers, and resorts which evolve to meet these demands are the ones which are thriving. With increasing numbers of non-skiers visiting, and summer attracting more tourists than winters, resorts can no longer rely on snow alone to bring people in. Dozens of high-profile resorts across the Alps have pledged large investments both on and off the mountain by in an effort to keep up with demand, and this is proving to be the way forward with resorts such as Chamonix and Val d’Isere now sitting at the top of the Alpine Property Index for 2017.

WHILE YOU ARE HERE...

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