72% of Resorts surveyed show either stable or increasing prices
2011/2012 has witnessed a turning point in the Alpine Property Market. The Alps is an enormous area and generalisations should be used with caution. Nevertheless, of 28 resorts that we have surveyed across Austria, France or Switzerland, 72% are either seeing price stability (a change of no more than +/- 5% in asking prices) or an increase of more than 5%. 42% of the resorts have witnessed an increase in asking prices by more than 5% during the last 12 months.
Principal factors contributing to the hardening of values can be attributed to increasingly tough planning regulations across the Alps - thus limiting supply; a perception amongst buyers that the Alps is a secure place to invest (both for lifestyle and income purposes) and an increasing realisation that enjoyment of a home in the Alps can be derived year round.
Just as postcodes can make a difference to the value of a property in the UK, resorts in Austria, France and Switzerland have their own micro markets:
Austria
One of the few countries to avoid technical recession in the EU, Austria has seen year on year static or steady price growth in its housing market since 2005. Prices increased 3.1% in 2011. Demand for Alpine property is not just driven by foreign buyers and local agents report that domestic demand is strong for second homes in Austria’s Alps. This helps drive values in an ever competitive market.
Jeremy Rollason, MD of Alpine Homes comments: “If we were stock brokers, Austria would currently come with a strong “Buy” recommendation”.
France
Although house price growth in France has also been strong over the last few years (doubling from 2000 to 2010), prices have since contracted in the last quarter of 2011 and the first quarter of 2012 by 1.2% and 1.1% respectively. In the second homes market, there was a 7% contraction in the number of overseas buyers in 2011, compared to 2010, although average prices paid were up 12% over the same period. In the Rhone Alpes, covering the majority of French ski resorts, values paid by overseas buyers were up to 27% compared to the previous year, suggesting a strong recovery from price falls in 2009 and 2010. Our tip would be to stick with the big name resorts such as Chamonix, Val d ‘Isere and Les Trois Vallées (Courchevel, Méribel, Val Thorens).
Switzerland
Although Sterling has recovered by 25% from an historic low in 2011, the Pound is still 40% weaker against the Swiss Franc than its recent peak in 2007. The Euro was on a similar downward spiral and had also depreciated 40% against the Swiss Franc until the Swiss National Bank intervened and pegged the currency at Chf 1.2/Euro in September 2011. Remarkably, this has not put off buyers of second homes in Switzerland. We cite the main reasons as:
- Perceived and real stability in the Swiss economy
- Availability and affordability of credit
- New legislation restricting the number of second homes in Switzerland to no more than 20%
“When the market wakes up to the consequences of the votation in March 2012 [restricting the number of second homes to 20% in any given commune], it will be too late to build that chalet in the Swiss Alps that you had once dreamed of,” observes Jeremy Rollason.
The Alps remains a highly sought after holiday destination in Europe and bolstered by increasing demand from new markets such as The Czech Republic, Russia and the Far East and a continuing supply shortage, we see an upward trend in values over the next 12 months.