Real Estate News | Residential Real Estate
European Ski Resort Home Sales Poised to Recover from Global Recession, Says New Global Ski Resort Property Index
By Michael Gerrity | September 16, 2011 8:00 AM ET
Things are looking up for luxury vacation home sales in certain upscale ski regions in Europe, according to a new Ski Resort property Index report from London-based Knight Frank.
Knight Frank's Head of Residential Research Liam Bailey says, "I am pleased to announce the launch of Knight Frank's Ski Resort Property Index. The Index will, for the first time, provide vendors, purchasers and those interested in these niche but expanding markets with a view on the performance of their luxury property market
- The French resort of Megève displayed a relatively strong recovery in property prices; recording 4.3% growth in the year to June 2011 but prices are still 4-6% below their 2008 sales levels.
- Although the US resorts of Telluride and South Lake Tahoe recorded a decline in prices annually, there is evidence that these markets are strengthening with both recording a slower rate of quarterly price declines in Q2 2011.
- The impact of the global recession was felt first in the European resorts in 2009. In most of the Alpine resorts prices have now stabilized with some, but not all, even seeing small price rises. The market remains price sensitive but correctly-priced properties are continuing to sell and on occasion attract multiple buyers.
- Overall, average annual price growth in Europe reached 1.7% in Q2 2011 compared to -3.0% across North America.
- Demand from Eurozone buyers has kept price growth in the French Alps in positive territory, replacing buyers from Russia and the CIS States whose presence is less evident post-2009
- Demand for property is proving less seasonal in many of the world's luxury ski resorts. Summer tourism, often involving hiking and climbing, particularly in The Alps, has helped to increase rental incomes for many second home owners.
"The stabilization, and in some cases recovery of prices in the French Alps can be attributed to a number of factors. Many French ski resorts are located at high altitude, which makes them (on average) more reliable in terms of snowfall. In the Austrian Alps by comparison, a chalet above 1,600m can be hard to come by. Furthermore, the French resorts are well-established, most offering an array of sports and activities beyond skiing, not to mention their gastronomic diversity. The French resorts have also benefitted from significant investment over the last five years which has meant the quality of skiing, accessibility and infrastructure has never been better. Courchevel is a case in point where year-on-year there are improvements being made to the resort's ski lifts and snow cannons.
"The traditionally favored resorts of Courchevel, Megève and Val d'Isere continue to lead the market in terms of sales activity. But it is worth highlighting the key sub-markets within the resorts which generate the strongest interest from buyers; Courchevel 1850; Mont d'Arbois in Megève, and the Belvedere and Routes des Chalets/Le Reynard in Méribel are all excellent examples.
"UK buyers who account for 35-40% of prime property purchasers in the French Alps have found themselves having to compete with more Eurozone, and particularly Italian, buyers who were not affected by the currency fluctuations at the time of the global economic downturn. Eurozone purchasers remained prominent during the 2010/11 season and this heightened demand meant some more cautious UK buyers saw their choice of property being sold before they are able to commit to such a purchase.
"Demand for property is proving less seasonal in many of the world's luxury ski resorts. Summer tourism, often involving hiking and climbing, particularly in The Alps, has helped to increase rental incomes for many second home owners. The Alps are now host to a number of summer festivals, concerts and sporting events attracting visitors all year round.
"Whilst prices have not increased across the board (and markets are still very price sensitive) levels of activity (especially viewings) have increased in the prime alpine resorts.
"Matthew Hodder-Williams, Head of the French Desk at Knight Frank, comments "The 2010/2011 season proved to be surprisingly robust with a strong level of sales activity in the French alpine resorts. Courchevel, Méribel, Megève and Val d'Isere performed well with the best properties attracting interest from more than one buyer enabling sales to be completed at or near the asking price.
"Hodder-Williams continues, "Stock levels remain relatively low whilst new chalet developments have brought a new level of quality and luxury to the resorts and compare favorably with those properties that have been available since before the beginning of the 2010/2011 season.