RESIDENTIAL RESEARCH

SKI PROPERTY REPORT 2018-19 ASSESSING PROPERTY MARKET CONDITIONS ACROSS THE FRENCH AND SWISS

SKI INDEX RESULTS 2018 INVESTMENT GUIDE TEN TRENDS TO WATCH SKI PROPERTY REPORT 2018-19 RESIDENTIAL RESEARCH

THE ALPS IN NUMBERS OVERVIEW 2018 SKI INDEX RESULTS Record snowfall and strong investment in infrastructure Now in its tenth year, our unique Ski Property Index tracks the annual change in the helped boost demand in the Alps in the last year but price of a four-bedroom chalet across 16 French and Swiss alpine ski resorts. property market regulations and the strong franc weakened activity in some Swiss resorts. The index declined by 0.5% in the year to boosted tourist numbers, buyer demand many looking instead for better value in June 2018, a more moderate decline than and hence chalet pricing. Austria or . The strong Franc is not Our annual report provides a snapshot limits options for buyers but the ‘residence the 1.8% fall witnessed in 2017. Thirteen only a factor in relation to the acquisition There has been a growing recognition of the 77million of the prime property market in the hoteliere’ is providing an alternative means of the 16 resorts recorded static or rising cost but also in terms of weaker long-term Number of ski visits to the French and prices in annual terms. Three years ago, relative value available in Villars. Home to rental demand. each year French and Swiss Alps, it assesses price for owners to acquire a property and rent it only five resorts registered price growth. three international schools, the resort also performance over the last year, explores out when not in use. For St Moritz (-11.1%), the robust Franc how the resorts compare in terms of their attracts a number of parent buyers seeking We revisit our Alpine map on pages 6 and Last year French resorts occupied the along with high pricing and a mismatch latest market indicators and examines a nearby base. Verbier’s ease of access, its 7 providing the latest facts and figures for top of our rankings, this year two Swiss between demand and supply have seen how the resorts are evolving. southern-orientation – making it one of the each resort and highlight which resorts resorts, Villars (6%) and Verbier (3.4%) have prices soften. There is pent up demand for Alps’ sunniest resorts – and its broad range Unlike the motivation behind a purchase rate best for key attributes, from snowfall summited. Both resorts have lagged behind smaller units but the current inventory is of leisure activities explain its high ranking. within the mainstream housing market, to ski schools. On pages 8 and 9 we delve in recent years but a surge in investment, comprised of older, larger style chalets. the purchase of a ski home is an into the ten trends set to influence the ski both in terms of ski lifts, luxury hotels, Elsewhere in Switzerland, the strength of Unlike the Swiss resorts, which occupy aspirational or lifestyle purchase. property market over the next decade, beginner areas and non-ski activities have the Franc has deterred some buyers, with the two extremes of our rankings table, the from currency rates to climate change 1/3 The results of our latest ski index (page 3) French narrative is one of moderation. None The French and Swiss Alps are home and new technology. of the eight French resorts tracked by the underline the extent to which economic FIGURE 2 to over a third of the world’s ski resorts sentiment, property regulations, wealth For those unfamiliar with buying or selling in The Knight Frank Ski Property Index, 2018 index registered a decline in prime prices in flows and infrastructure investment are the Alps, on page 10 we set out the key Annual % change to June 2018* the year to June 2018. combining to influence price performance. stages in the purchase process and offer Record snowfall boosted enquiries across some tips for those buyers and vendors Overall, prices fell by 0.5%, a modest the region during the 2017-18 ski season working to a specific timetable. Finally, on improvement on a fall of 1.8% in the and for France, an improving economy, page 11 we provide our outlook for the strengthening consumer sentiment and previous year, with the Swiss resorts of 6.0% Alps, we explore why the current economic growing interest from northern Europeans, Villars and Verbier on top. Both resorts VILLARS climate is prompting some buyers to look in particular amongst Scandinavian and have invested heavily in new ski lifts, 3.% closely at their mortgage terms and we Benelux buyers has lifted sales rates. 8.23metres hotels and sport centres and we are VERBIER Verbier’s snowfall in 2017-18 season. highlight where future demand is likely to 3.0% The highest of the 16 resorts tracked increasingly seeing a direct correlation come from. VAL D’ISÈRE In 2018, Val d’Isère (3%) has overtaken between property price performance 2.3% (2.3%) as the top-performing and the wider resort’s long-term FIGURE 1 CHAMONIX French resort. At 1,850m Val d’Isère is investment strategy. Pile it high Total snowfall (cm) in one of France’s highest resorts resulting in € 2.2% 2.2% reliable snowfall, quality skiing and a longer Enquiry numbers strengthened in the COURCHEVEL COURCHEVEL 2017-18 season as snowfall reached 95 10 104 301 406 421 224 216 504 1550 1650 season. Val d’Isère generated more buyer record levels. Figure 1 shows total enquiries than any other resort last season snowfall for Courchevel during the 1.% but supply remains constrained. 2017-18 ski season, more than 5 metres COURCHEVEL 1.1% 1850 Attracting a different demographic to Val 6% fell between November and April, double MEGÈVE Prime price change in Villars. d’Isère, Megève and Courchevel continue the amount recorded the previous year. The highest of the 16 resorts tracked % to build on their brand as luxury resorts in year to June 2018 In France, rising consumer sentiment 0. MÉRIBEL with exemplary customer service and following Macron’s presidential victory in 0.6% GSTAAD amenities. Courchevel 1550 and 1650 2017 and improving economic indicators (2.2%) marginally outpaced 1850 (1.5%) fed through into buyer enquiries with % % % in our annual price rankings due to their Val d’Isère high in demand. 0.0 0.0 0.0 ANDERMATT CRANS relative affordability. The lower resorts have MONTANA On pages 4 and 5 we set out how the key a greater dynamism with a number of public ski resorts are upgrading their offer and and private investment projects underway. investing in both ski and non-ski facilities .0% Registering 0.9% annual growth, Méribel and take a look at what owners need to 10.7% DAVOS has largely peaked in terms of new-build know if they plan to buy, develop or rent KLOSTERS 600km opportunities meaning buyers usually opt to Total piste length in The Three Valleys. in the Alps. buy older stock and re-build. Méribel Village The largest ski domain of the 16 11.1% resorts tracked Planning rules in France, for example, ST MORITZ is increasingly under the spotlight as buyers need careful monitoring and vary from seek new-build opportunities at 16,000

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 € resort to resort whilst in Switzerland, the Source: Knight Frank Research, UBS (Klosters, Davos, St Moritz) per sq m compared with 20,000 per sq m Source: 2018 International Report on Snow & Source: OnTheSnow * Based on a 4-bedroom chalet in a prime central location, not of ‘super-prime’ specification. € Mountain Tourism 20% cap on second homes (Lex Weber) Note: November to April Prices reflect an average for the resort, including both new and resale properties in central Méribel.

2 Please refer to the important notice at the end of this report 3 SKI PROPERTY REPORT 2018-19 RESIDENTIAL RESEARCH

FIGURE 4 RAISING THEIR GAME INVESTMENT GUIDE What can I expect to rent my 4-bedroom chalet for in high season? € per week A reliable ski lift and a few snow cannons are no longer enough, ski resorts are It pays to do your research and make sure the numbers competing with each other to offer the best dual season experience. stack up if you plan to rent your ski home. € 9,000 € 4,600 € 4,200 € 2,800 € 9,000 € 7,000 € 3,000 € 20,000 € 17,300 € 12,000 € 12,000 € 10,000 € 4,600 For several years, Knight Frank’s and the ability to access a larger ski potential rental income of a property over For most buyers, the purpose of a indication of potential rental competition) Ski Property Index has confirmed the domain can be the difference between the summer months. ski home it to enjoy holidays with vary significantly across the Alps and in 60% and 80% rental occupancy in the link between a resort’s investment in Buyers are paying close attention to family and friends, but increasingly some cases are directly linked. Gstaad winter months. its infrastructure (ski lifts, hotels, those ski resorts with a long-term plan most owners want to cover their costs for example has only 3,700 second spas, non-ski activities etc) and its Similarly, the provision of mountain and secure funding in place. Below we and maintenance by renting their homes and one of the highest rental property market’s performance. bike trails, leisure centres and zip wires highlight some of the future investment chalet or apartment. values during high season. Alongside, The speed and capacity of ski lifts can make a significant difference to the commitments on a resort-by-resort basis. we present the latest indicators to help Rental values, occupancy rates and the prospective buyers gauge current rental number of second homes per resort (an market conditions. FIGURE 3 How the resorts measure up – future investment plans COURCHEVEL 1850 GSTAAD VAL D'IS È RE M É RIBEL VERBIER COURCHEVEL 1650 COURCHEVEL 1550 MEG È VE CHAMONIX VILLARS CRANS MONTANA COMBLOUX ST GERVAIS Source: Knight Frank Sales Network ¹ Based on a 4-bedroom chalet in a central location in high season. Exchange rate as at 29 June 2018 LEX WEBER AND THE RISE OF THE ‘RESIDENCE HOTELIERE’ FIGURE 5 The Mademoiselle Val The Lex Weber ruling, introduced in 2013, set a 20% cap on the number Les Veriaz 950-bed 4* hotel The Mademoiselle Val How many second homes are there per resort* AA new new lift lift will will replace replace the the LaLa CroisetteCroisette DevelopmentDevelopment atat NewNew RocRoc dede Tougne Les Veriaz 950-bed 4* hotel ( 60m), Comte Capre d’Isère, the highest hotel MarmottonsMarmottons and and Tabe Tabe 18501850 willwill improveimprove accessaccess 6-seater6-seater ChairliftChairlift forfor (€60m), Comte Capre of second homes in each Swiss commune. Whether resident or non- 130-bed 5* hotel ( 100m) in FranceFrance (2,550m)(2,550m) isis chairliftschairlifts at at Grand Grand Montets Montets forfor skiersskiers andand pedestrianspedestrians 2018/20192018/2019 (takes(takes 33 mins) 130-bed 5* hotel (€100m) France set to open in 2018/19 and Accor 100-bed hotel set to open in 2018/19 resident, no further second homes can be built once this threshold has been reached. The premise behind the law was to prevent ‘cold beds’ – the 27 million new Le Praz 42 million invested in 2,100 3,700 4,200 5,200 6,000 6,400 6,800 7,300 8,600 8,900 AA new new replacement replacement €€27 million new Le Praz €€42 million invested in New gondolas and 250 million Le Coin 10,400 10,600 €250 million Le Coin gondola base station will be Courchevel and Meribel € 10-seater10-seater gondola gondola gondola base station will be Courchevel and Meribel snow cannons ( 85m) existence of empty second homes – and encourage ‘warm beds’ – by attracting on grangettes gondola € de Val redevelopment atat Flegere Flegere completedcompleted DecemberDecember 20192019 on grangettes gondola includingincluding 500500 parkingparking spacesspaces andand LaLa CroisetteCroisette more tourism and therefore investment in the local economy via higher Development,Development, ahead of occupancy levels. 20232023 FISFIS AlpineAlpine WorldWorld Ski LeLe Tour Tour lift lift station station New congress New lift in the Solaise LaLa Tania Tania MorettaMoretta VillageVillage ChampionshipsChampionships New congress renovatedrenovated by by winter winter centre ski area (3,600 skiers DevelopmentDevelopment centre By creating hotel style residences, with services such as a concierge, buyers 2018/192018/19 per hour) are still able to purchase a holiday home provided they rent the property when not in use. In most cases, the owner can use their ‘residence hoteliere’ up to a LaLa Folie Folie Douce Douce to to open open Two new chairlifts and 77 newnew hotelshotels recentlyrecently Two new chairlifts and New Black run and the inin December December 2018 2018 on on completedcompleted oror underunder improvingimproving links Teleski des 3000 will maximum of six weeks per annum. This acquisition is considered a commercial formerformer Club Club Med Med constructionconstruction between Rochebrune re-open in 2018/19 seasonseason ChamonixChamonix site site and Cote 2000 and not a residential purchase and as such does not fall under the residency (due 2020/21) restrictions on either property size or rental duration. 115115 newnew snowsnow cannonscannons New 4* hotel, La 477477 million million 40-year 40-year €€ Toviere, in La Daille investmentinvestment plan plan inin CourchevelCourchevel && LaLa Toviere, in La Daille TaniaTania valleysvalleys village will open in December 2018 CRANS MONTANA GSTAAD VILLARS MEG È VE ST MORITZ CHAMONIX & KLOSTERS DAVOS VAL D'IS È RE VAL COURCHEVEL VERBIER M É RIBEL ANDERMATT

AmanAman lele MelezinMelezin hotelhotel inin The Val d'Isère liftlift CourchevelCourchevel 18501850 reopensreopens company pledge to DecemberDecember 20182018 WHY IT PAYS TO KNOW YOUR PLAN LOCAL Source: UBS, Swiss Federal Office for Spatial remove 100 lift pylonspylons onon Development, INSEE their mountains byby 20222022 D’URBANISME (PLU) *Note: Some destinations consist of multiple municipalities

A plan local d’urbanisme (PLU) is the French name for a local plan which sets out FIGURE 6 the planning zones for the area and the rules for new development. If you intend What is the rental potential of my ski home? to build or extend your property in an area with a PLU you will need to submit an Occupancy in Occupancy in application to the local town hall (’mairie’) for approval. Below we highlight some of 100% high season* low season* Four new 4 & 5-star SixSix senses senses Crans Crans PrivatePrivate bookingsbookings ofof thethe BrusonBruson regenerationregeneration Résidence Alpine Hedonia hotels, apartments & the recent changes by resort: MontanaMontana 47-room 47-room CorvatschCorvatsch skiski areaarea hotels, apartments & projectproject (CHF300m)(CHF300m) & shopping centre sports centre (CHF1,000m) hotelhotel (2020) (2020) permittedpermitted untiluntil midnightmidnight sports centre (CHF1,000m) 80% Chamonix Megève

Grand Hotel Rodania NewNew GraceGrace HotelHotel Road access Grand Hotel Rodania NewNew sportsport centre 40-room 5-star hotel openingopening inin 20202020 Parking (CHF40m) Schöllenen gorge • The construction of two or more • Pro-construction PLU plan now Switzerland 40-room 5-star hotel (CHF50m)(CHF50m) (2020)(2020) (CHF50m)(CHF50m) (CHF105m) dwellings is restricted to a maximum in place – potential for 300 new 60% area of 300m² apartments in next two years NewNew cablecable carscars && Ski and non-ski Retirement home Curala ski lift upgrade connectionconnection ofof skiski Curala ski lift upgrade infrastructureinfrastructure and post office (CHF115m) • Planning permission calculations are Val d’Isère 40% areasareas (CHF75m)(CHF75m) (CHF115m) (CHF30m) (CHF14m) now based on the footprint of the • Initiative to regenerate tourist New Railway station – building not the total floor area New apartment project New Railway station – buildings as well as support and Glacier Express hub 20% at Domaine du Roc Glacier Express hub (CHF20m) develop the hotels in the resort. (CHF20m) (CHF20m) Courchevel • Encourages housing stock renewal, CHAMONIX Hotel du Roc GSTAAD COURCHEVEL M É RIBEL D'IS È RE VAL ST MORITZ VERBIER MEG È VE CRANS MONTANA ANDERMATT Hotel du Roc 0% VILLARS (renovation) allowing more internal square metres (CHF15m) (CHF15m) than the previous PLU plan. Source: Knight Frank Research, Tourist Offices *High season = February half term / Low season = Last week of April

Source: Knight Frank research, Zahlen und Fakten, Ferienregion Andermatt, UBS AG, LuzernerZeitung, Andermatt Swiss Alps AG For a detailed understanding of the Swiss rules on where non-residents can buy and the implications of the 20% second home cap at a local level please contact [email protected] or if you want more information on the PLU (local plans) in the French resorts please contact [email protected]

4 5

GstaadChamonixCourchevelMeribelVal d'IsereSt MoritzVerbierMegeveCrans MontanaVillarsAndermatt SKI PROPERTY REPORT 2018-19 RESIDENTIAL RESEARCH

Klosters

CHF ALPINE FACTFILE.... 1182 - 3 CHF 110 1 7 30 CHF318 21 Davos Buyers need to weigh up multiple factors when deciding where to purchase a ski home. Advanced skiers may prioritise altitude to CHF maximise snow reliability throughout the season, whilst families 1202 - 3 CHF8 10 1 8 311 CHF311 22 with beginners may consider a dual season resort with a broader Andermatt range of facilities. Below we have presented the key facts and figures to help determine where bests suits your needs and CHF 1000 CHF60 2 CHF 1 1 86 CHF273 2 provided our own in-house awards for best in class. St Moritz

CHF Best resort for…. 20806 - 2 CHF70 1770 2 30 CHF36 20 Gstaad

CHF CHF Best summer season 3800 20000 2 CHF8 100 2 3 220 CHF321 28 rental demand URICH Villars

Chamonix & Verbier FRANCE CHF CHF 1308 200 2 CHF0 1300 1 2 12 CHF2 20

Crans Montana Neuchtel Shortest drive from CHF CHF 6 100 2 10 332 23 the airport Klosters 12623 70 2 CHF CHF Verbier T Combloux, Chamonix & Megève Davos SWITZ ERLAND CHF CHF 2236 3860 1 CHF6 130 1 1 12 CHF3 2 Andermatt Gstaad St Moritz Chamonix

Lake Geneva Cheapest ski school Crans Villars Montana €1120 €7 1 €1 103 1 8 3 €306 20 Combloux & Megève Combloux E E

Sion

€800 €300 3 €33 80 1 3 €186. 18 GENEVA Verbier Lugano Megève E E Highest resort Chamonix Combloux €1360 €7000 2 €3 1110 1 8 €186. 18 Val d’Isère & Courchevel 1850 LON Megève Mribel T T Bourg-Saint- Maurice Mribel Village CHAMBER €170 €12000 3 €3 10 1 600 €27 21 Access to largest Mribel Val D’Isère E K ski domain Courchevel 10 Val d’Isère Courchevel 180 Courchevel Courchevel & Méribel 10 €1000 €12000 2 €49 180 2 300 €2 23 Courchevel 10 T T

Longest season €16000 €000 3 €3 10 1 8 600 €27 21 length Courchevel 10 T T Key Gstaad & Verbier €16000 €000 3 €3 160 2 2 600 €27 21 Prime price for Rent for Summer season Cost of Drive time Total Price of a Season Knight Frank 4-bedroom chalet 4-bedroom chalet rental ranking school per child height to nearest pistes weekly ski length** sales office Courchevel 180 T T (€/CHF per sq m) (€/CHF per week (1 = good, (group session, (m) major airport (km) pass* (weeks) and network in February) 5 = poor) morning only) (€/CHF) members (€ / CHF) G = Geneva Airport Z = Zurich Airport €200 €20000 4 €6 180 2 7 600 €27 21

Source: Knight Frank Research, Ski Club of GB, OnTheSnow Note: Prices and rents are based on a 4-bedroom chalet in a central location within each resort. *The weekly ski pass is based on the price of the wider ski domain, in the case of Chamonix this is the Unlimited pass providing access to Verbier, Courmayeur and Espace Evasion **Rounded to nearest full week. The Knight Frank network includes representative offices. Rental data for Klosters, Davos and St Moritz unavailable

6 7

SKI PROPERTY REPORT 2018-19 RESIDENTIAL RESEARCH

TEN TRENDS SET TO INFLUENCE SKI MARKETS From climate change to Asian interest and from currency rates to the latest technology, we highlight the key trends it’s worth monitoring

Climate change Tighter monetary conditions Despite record snowfall in the Not immediately, but over time the cost of finance 2017/18 season, temperatures in in the Eurozone is likely to rise. The European Central the Alps have risen by just under Bank announced its plans to halt its asset-buying programme 2°C over the past 120 years, (quantitative easing) in December 2018 and interest rate rises may almost twice as much as the start to shift upwards from the end of 2019 but they will remain low by global average. historic standards. Swiss interest rates look set to remain in negative territory for some time. Global warming is expected to bring about changes in rain and Buyers seeking a mortgage may find costs slightly higher over the next few years snowfall patterns, there is the and more may seek to lock themselves in to a longer fixed rate deal in the coming Property market regulations & Airbnb potential for heavier but less months to take advantage of the current low rates. Exchange rates frequent snowstorms. Not only is Policymakers are increasing keen to improve transparency in an effort technology in the form of snow We estimate 40% of ski home purchases in the to monitor/control who is buying what and where. Switzerland has seen guns and cannons helping, but the Dual season Alps involve a foreign stakeholder, be it a buyer or some of the most stringent rules imposed starting with Lex Koller in new machines are more energy vendor, meaning exchange rates have an important The days of buying a ski home for use exclusively in the winter 1983 (establishing areas where non-residents can not purchase) and efficient and specialist machines months are gone. The Alps have been able to capitalise on the bearing on the transaction. A €2m chalet would more recently with Lex Weber in 2013 (the 20% cap on second homes are now used to relocate snow today cost a British buyer £188,000 more than global push to improve health, fitness and make the most of the per commune). to the busiest pistes. It is likely, great outdoors. Summer tourist numbers now rival those in the it would have done a decade ago as a result of however, that we will see more the weaker pound. Whether planning your exit The faces fewer rules but even here, close attention is winter months with a broad range of activities on offer, including buyers target high altitude resorts mountain biking, hiking, paragliding, abseiling and glacier strategy or contemplating which price bracket to being paid to the scale and design of future development to ensure it is to maximise their season length target, it pays to monitor the exchange rate. sustainable and sensitive to the Alpine landscape. skiing. A prolific calendar of social, cultural and sporting events in coming years. throughout the year, from Polo Championships to Jazz and Food festivals, also boost tourist and rental numbers.

Going big Ski resorts are joining forces to create vast Infrastructure investment domains in an effort to attract more skiers. Some ski domains are fully linked by lifts Chinese Standing still is not an option for the and telecabines, others have a shuttle bus Alpine resorts as they seek to attract which is included in the cost of the ski pass. interest a new generation of skiers, as we’ve France is home to more than half of the ten The 2017 China White Book estimates Family time highlighted elsewhere in the report. biggest ski areas in the world. At 600km, that of the country’s 1.2 million skiers Technology Villars has ploughed significant funds into the Three Valleys is the largest, stretching Unlike beach holidays where teenagers often head off over half travel abroad to ski, Japan is reinventing its offer whether it is night from Courchevel to Méribel across to Les Advances in technology are reshaping the independently with friends, skiing in the Alps provides the high on their list. Cheaper travel and skiing, the new swimming pool or new Menuires and Expect to see skiing landscape. From ergonomic boots and opportunity for a full day of shared pursuits and valuable rising wealth is likely to mean more gondolas and a beginners’ area. Ahead of more resorts link up. parabolic, curved skis to adaptive skiing for family time when the family remains as one on the Chinese tourists and buyers in the the FIS Alpine World Ski Championships disabled individuals, it is now easier for a larger slopes, sharing lunch and an evening meal. This USP This push to experience more Alps. The number of people in China in 2023 we expect Courchevel and demographic to take up the sport. Add to this for the Alps is likely to come into sharp focus in the and travel further has led to with US$5 million is forecast to rise by Méribel to be a key investment hub. Apps capable of following one’s friends on the coming years. a new Swiss 'magic pass' 218,000 to 425,270 between 2017 and which provides access to 30 2022 and analysts report that 2018 has mountain, measure your speed against other A number of the Swiss resorts host some of the world’s resorts and 1,000km of slopes seen nine new flight routes open up from skiers, as well as gadgets such as heated top private schools (Villars, Verbier, Crans Montana) and for around CHF500 per year. China to Europe, which translates into gloves, air-bag vests and camera drones to this attracts international buyers seeking a base when 6,000 more seats per week. track your route downhill, such advances may visiting their children. improve safety, comfort and personal bests.

8 9 SKI PROPERTY REPORT 2018-19 RESIDENTIAL RESEARCH

BUYER TIMELINE VENDOR TIMELINE STAYING How to be in your new ski How to sell your ski home MARKET OUTLOOK home for Christmas by the end of the season ON TRACK Home to the world’s oldest and most sport enthusiasts ahead of the Beijing will continue to want a rental return to OCTOBER/NOVEMBEROCTOBER/NOVEMBER MARCHMARCH aspirational ski resorts, the Alps continue Winter Olympics in 2022. cover ownership costs, maintenance Alongside, our experts to attract global interest. However, and family ski visits. More flights from DecideDecide on preferred on preferred resorts resorts and and Sale decision.Sale decision. Arrange Arrange professional professional But the Alpine ski market can’t be property search criteria. Register photography to take advantage of based on the experience of our Alpine more locations by low-cost carriers help set out the timeline property search criteria. Register photography to take advantage of purely at the behest of Asian demand, with a withglobal a globalagent agentthat has that a localhas a local snowysnowy conditions. conditions. Request Request market market network, unlike mainstream markets maximise potential rental demand and presence and knowledge. Explore appraisal from reputable agent particularly when outbound capital flows to work to in order to presence and knowledge. Explore appraisal from reputable agent in some parts of the world, external boost income but outgoings are also financefinance options. options. A mortgage A mortgage offer in offer in are being curtailed in China. achieve your goal. This principleprinciple needs needsto be into place be in beforeplace before factors such as the global financial under scrutiny. exchange. Provide feedback on APRILAPRIL exchange. Provide feedback on crisis and geopolitical tensions have not Switzerland’s safe haven credentials, its is meant as a guide only initial propertyinitial property listings listings to agent. to agent. Visit Visit Data from Credit Suisse shows the with agentwith agentprior to prior start to of start season of season had the same impact on sentiment and strong economy, currency, privacy and ReviewReview appraisal, appraisal, agree agreesale price sale price extent to which mortgage rates have and we can assist at any beforebefore rentals rentals commence commence to enable to enable transaction volumes as they have had on security will continue to put it at the top easy access and salesand mandatesales mandate (if applicable) (if applicable) dropped in France over the last five easy access mainstream housing markets. of global HNWI’s preferred list of places years. Given finance costs are expected time of the year. DECEMBERDECEMBER APRILAPRIL TO UNE TO UNE The rise in wealth globally, in places such to shelter from economic and political to increase in the coming years it is likely For many of our buyers it is the UndertakeUndertake research research if you planif you to plan to SpeakSpeak to accountant to accountant to understand to understand as Latin America, , the Middle turbulence but it comes at a cost. we will see more HNWIs take advantage first time they have bought abroad rent yourrent ski your home ski home– occupancy – occupancy tax liabilities.tax liabilities. Collate Collate all relevant all relevant East and Eastern Europe is expected of the current low European interest rate levels, levels,achievable achievable rents, rents,the resort’s the resort’s paperwork (permits, conformity, taxes, Since 2015 when the Swiss Franc was and for some they are working to paperwork (permits, conformity, taxes, to offset some of the challenges posed environment and refinance. Debt can be future futureinvestment investment plans etcplans etc title deeds,title deeds, property property images images and and unpegged from the Euro, the Franc has a specific date or event when they informationinformation for the for Diagnostic the Diagnostic by an ageing demographic of skiers in seen as an efficient way of diversifying a ANUAR Performance Energétique (D PE)) drifted higher but for some it is a price want to be settled in their new ANUAR Performance Energétique (D PE)) Europe. However, all eyes are currently balance sheet. UL UL on Asian demand which has the capacity worth paying – whether as a long-term home. For others looking to sell, However, regardless of the potential FurtherFurther viewings/research viewings/research to radically reshape the global ski market investment, to be near a child attending many are keen to maximise rental return, currency advantage or good (if needed)(if needed) in the coming years. school in Switzerland or as a means CommenceCommence marketing marketing income by completing the sale at of spreading risk by decreasing their finance options, ultimately the decision FEBRUAR/MARCH Asia’s strong rate of wealth creation and to acquire a ski home is an emotive the end of the ski season. FEBRUAR/MARCH exposure to solely Dollar or Euro- SEPTEMBERSEPTEMBER a growing appetite for travel amongst one, borne out of a desire to own an Decide on preferred property, denominated assets. For a detailed breakdown of the Decide on preferred property, its high net worth individuals, as well as asset that will provide valuable time with take advicetake advice from agent from agentand make and make offer (with mortgage offer in place Although most ski purchasers will buying process as well as costs offer (with mortgage offer in place ScheduleSchedule viewings viewings the increasing popularity of winter sports friends and relatives whilst undertaking a and taxes read our buyer guides if needed)if needed) could bolster global demand. China not be buying a ski home purely for shared pursuit. In the modern age, a ski Agree price with vendor and instruct Notary Agree price with vendor and instruct Notary alone aims to have 300 million winter investment purposes, we expect most home can offer a rare escape. for France and Switzerland, OCTOBEROCTOBER https://www.KnightFrank.com/ MARCHMARCH FIGURE 7 overseas-property FacilitateFacilitate viewings viewings / / If you Ifplan you to plan rent to the rent property the property reviewreview offers offers The resorts compared – measuring prices, price growth and season length take marketingtake marketing photos photos while snowwhile snow is still onis still the on ground the ground NOVEMBERNOVEMBER 30,600 Circle size = Prime Prices € APRIL/MAAPRIL/MA Switzerland (€ per sq m) France 8,500 FacilitateFacilitate viewings viewings / / € ExchangeExchange contracts contracts (Compromis (Compromis reviewreview offers offers de ventede ventein France in France / Promesse / Promesse de de vente vente/ Vente / Venteà terme à termein Switzerland in Switzerland / Villars / NO VAT ON NEW-BUILD DECEMBERDECEMBER 6% PROPERTIES UNE/ULUNE/UL Val d’Isère FacilitateFacilitate viewings viewings / / 4% Courchevel 1550 & 1650 In France, buyers can reclaim the VAT CompleteComplete sale (Signature sale (Signature de Acte de Acte reviewreview offers offers Verbier in France / Acte de vente in Chamonix (20%) on the price of some off-plan in France / Acte de vente in 2% Gstaad properties by committing to renting out Switzerland).Switzerland). Commission Commission builder builder ANUARANUAR Megève Andermatt and scheduleand schedule potential potential works works (if (if their home for a period of 20 years. needed).needed). Instruct Instruct lettings lettings agent agentif if 0% you planyou to plan rent to the rent property. the property. AcceptAccept offer, agreeoffer, agreewhat iswhat is 15 20 25 30 In order to qualify three of the AdvertiseAdvertise the property the property for rent for and rent and includedincluded in sale, in instruct sale, instruct Notary Notary Combloux Méribel following four services must be offered take bookingstake bookings for winter for winter season season -2% Crans Montana by the property: UL/AUGUST FEBRUARFEBRUAR UL/AUGUST -4% Courchevel 1850 • A guest reception, on site or nearby ExchangeExchange contracts contracts (Compromis (Compromis de vente in France / Promesse de • Breakfast UndertakeUndertake renovations renovations (if needed) (if needed) de vente in France / Promesse de -6% vente/vente/ Vente Venteà terme à termein Switzerland) in Switzerland)

• Provision of fresh linen 2018 PRICE GROWTH • Room cleaning at least three times APRILAPRIL -8% NOVEMBER/DECEMBERNOVEMBER/DECEMBER a week Davos -10% These services can be contracted out OrganiseOrganise removals removals St Moritz RentalRental bookings bookings commence commence / Klosters / and it can equate to a relatively low -12% cost in return for a significant saving. CHRISTMASCHRISTMAS MA MA

Clients should seek specialist advice from a qualified CompleteComplete sale (Signature sale (Signature de de LENGTH OF SEASON (WEEKS) tax expert or property lawyer. Enjoy Enjoyan Alpine an Alpine Christmas Christmas Acte inActe France in France / Acte /de Acte vente de vente Source: Knight Frank Research, Ski Club of GB, UBS in Switzerland)in Switzerland)

10 11 KNIGHT FRANK INTELLIGENCE For the latest news, views and analysis on the world of prime property, visit KnightFrank.com/blog

RESEARCH ENQUIRIES Liam Bailey Global Head of Research +44 20 7861 5133 [email protected]

Kate Everett-Allen International Residential Research +44 20 7167 2497 [email protected]

PRESS OFFICE Astrid Recaldin International PR Manager +44 20 7861 1182 [email protected]

Knight Frank Research provides strategic Get in touch advice, consultancy services and If you’re thinking of buying in the French or Swiss Alps, or would just like some property forecasting to a wide range of clients advice, please do get in touch, we’d love to help. worldwide including developers, investors, funding organisations, corporate institutions Maria Morris and the public sector. All our clients Partner, MENA Residential recognise the need for expert independent +971 56 4542 983 advice customised to their specific needs. [email protected]

Knight Frank can advise on all aspects of property ownership across Europe, from acquisition to ownership and disposal. Relevant contacts are listed above. Further details are available on our website at www.knightfrank.com/overseas-property.

Important Notice RECENT MARKET-LEADING RESEARCH MARKETING © Knight Frank LLP 2018 – This report is published

RESIDENTIAL RESEARCH RESIDENTIAL RESEARCH RESIDENTIAL RESEARCH FRANCE INSIGHT INSIGHT SWISS LAKES for general information only and not to be relied upon in 2018 2018 INSIGHT 2018 any way. Although high standards have been used in

AMY REDFERN, OF KNIGHT FRANK’S ITALIAN DESK, SHARES HER ALEX KOCH DE GOOREYND, HEAD OF KNIGHT FRANK’S SWITZERLAND MARK HARVEY, HEAD OF KNIGHT FRANK’S EUROPEAN SALES, INSIGHTS ON ITALY’S PRIME RESIDENTIAL MARKET. SHARES HIS INSIGHTS ON FRANCE’S PRIME RESIDENTIAL MARKET. DESK, SHARES HIS KNOWLEDGE AND INSIGHT ON THE SWISS LAKES’ PRIME RESIDENTIAL MARKET. the preparation of the information, analysis, views and HOW IS THE MARKET PERFORMING? WHERE ARE THE HOTSPOTS? ALPINE HOW IS THE MARKET values – perhaps the key reason as to why The first quarter of 2018 has brought with it Italy’s cities are en vogue. Florence, Rome AMY REDFERN WHAT DO BUYERS WHO ARE WHAT TRENDS ARE YOU NOTICING encouraging signs following a muted 2017. and Lucca currently account for around 40% ALEX KOCH DE GOOREYND PERFORMING? real estate demand continues to grow in MARK HARVEY Senior Negotiator, Italian desk CONSIDERING PURCHASING IN IN 2018? these destinations (with enquiry numbers up Head of European Sales Super-prime sales (€10m+) have increased of our enquiries. +44 20 7861 1057 Head of the Switzerland Desk significantly and this is expected to filter down [email protected] SWITZERLAND NEED TO KNOW? Residents that work in Geneva are showing +44 20 7861 1109 Over the last 24 months we have seen 100% compared to 2016). +44 20 7861 5034 Tuscany, the embodiment of Italian charm, [email protected] [email protected] to lower price bands in the coming year. There are two distinct markets in Switzerland, a greater willingness to commute to the city a remarkable reversal in France’s prime remains high on many wish lists, along with projections presented in this report, no responsibility or from areas in the Canton of Vaud such as La residential markets stemming largely from a WHAT TYPE OF PROPERTY IS IN In Italy, homeowners have displayed a the Northern Lakes. those where non-residents can buy (largely strong Paris market (where prices increased confined to ski resorts as well as the immediate Côte and even from Lausanne where property VIEW reluctance to acknowledge the reality of GREATEST DEMAND? Waterfront homes (Portofino and Costa prices and municipal taxes are lower. The Swiss by some 12% in 2017). Against a positive softening prices over the last decade, which has areas surrounding Montreux, Lugano, Smeralda in Sardinia) saw an uptick in Riviera (stretching from Montreux to Vevey) “ RESIDENTS THAT WORK IN economic and political backdrop, France is The popularity of different kinds of property “ FRANCE AND ITS RICH boosted stock levels and drawn out the market’s Interlaken and Lucerne - see figure 2) and demand in 2017, with the super-prime boasts excellent schools and views across Lake now experiencing a buoyant and incredibly depends a great deal on location. In Paris, recovery. Despite this, Knight Frank’s Italian those where non-residents cannot buy, which GENEVA ARE SHOWING A notably active. Geneva, and sits within a 75-minute train ride of exciting residential market rebound. “L’effet traditional properties with grand proportions CULTURAL TAPESTRY Prime Residential Index confirms that the rate of market includes the cities of Geneva and Zurich. This the city itself. GREATER WILLINGNESS TO Macron”, as witnessed since the summer of and period features are most in demand, REMAINS AN ATTRACTIVE luxury price declines is now bottoming out with liability whatsoever can be accepted by Knight Frank LLP WHAT TYPE OF PROPERTY IS IN clear distinction, established by a law known as COMMUTE TO THE CITY FROM last year, has caused a ripple of optimism while the preference in the south of France Liguria, Chianti and Milan registering positive Lex Koller, results in two very distinct property Switzerland’s super prime market has become from Paris to the internationally sought AND COMPELLING polarised. From CHF20m to CHF40m vendors AREAS IN THE CANTON OF is typically for a local architectural vernacular price growth in 2017. GREATEST DEMAND? markets operating along very different lines. after regions including the Côte d’Azur, with a more contemporary interior twist. INVESTMENT AND face strong competition making pricing and a VAUD SUCH AS LA CÔTE Our enquiry numbers for Italian homes, up 133% The type of property is dependent on the city Provence, the Alps and South West France, Budgets vary accordingly, albeit the majority Where non-residents can purchase a home, property’s condition critical. At the ultra-prime LIFESTYLE CHOICE.” in 2017 year-on-year, suggests any uncertainty or region. In Italy’s cities, international buyers AND EVEN LAUSANNE.” all of which have witnessed a strong they can only buy a single property where the level (above CHF40m), demand remains stable, of our buyers look between €2 and €5 on the political or economic stage – the general are seeking two or three-bedroom apartments turnaround in sentiment, buyer interest official living space does not exceed 200 with those properties offered in an immaculate million and seek elegant, turnkey ready election, banking crisis and Brexit negotiations – in central locations but critically these must be condition generating the strongest interest. for any loss or damage resultant from any use of, reliance and transactional activity. accommodation with manageable gardens have not influenced buyers’ decision-making. finished to a very high specification, in a prime square metres. However, buyers still need to and ideally a breath-taking view. location and a ‘hassle-free’ purchase requiring FIGURE 1 be aware of the Lex Weber law which places a Although the Swiss Franc dipped against key The only notable impact has been at the very FIGURE 1 WHO’S BUYING IN FRANCE? no additional work. TYPICAL PRIME RESIDENTIAL PRICES 20% cap on second homes in key communes. currencies in the last year it remains strong by In contrast, in the Alps demand is frequently top end of the market where wealthy buyers, SWITZERLAND’S DEMOGRAPHIC € per sq m, Q1 2018 historic standards. While this can influence buyer International buyers continue to be the focused on new-build properties, with off-plan although still active, have reduced their budgets In Venice and the Northern Lakes, those In contrast, Swiss residents face less PROFILE sentiment in all Swiss markets, buyers in the lakes driving force of prime residential sales. The developments representing 80% of the Alpine FIGURE 1 to mitigate risk and currency exposure. buyers with deep enough pockets want restrictions on where or what they can 0 5,000 10,000 15,000 20,000 25,000 30,000 tend to focus more on the long-term gain and lull following the EU referendum proved only homes sold across our network last year. direct canal or lake frontage to maximise PARIS RECORDS STRONGEST PRICE purchase, although non-European passport lifestyle benefits. Here, a property boasts year- Non-residents momentary; with the British demographic their investment, both from a lifestyle and Costa Smeralda on or reference to the contents of this document. As a The advantages of buying off-plan in France GROWTH IN 2017… WHO’S BUYING IN ITALY? holders are restricted to one primary residence. round appeal, offering summer by the lake once again accounting for up to one in four are multiple and might include staggered Prime residential prices, annual % change, 2017 rental perspective. Rome whilst some of the top Alpine resorts sit within prime residential purchases. The remaining The lifestyle on offer in Italy remains the primary payments, the most advanced construction Finally, in rural parts, a stone-built farmhouse an hour’s drive. 55,022 75% of buyers typically stem from northern motivation for most international buyers. A HOW DO RESIDENT AND NON- techniques and materials, a 10-year with a few hectares, an attractive pool and Portofino Europe (Benelux, Switzerland, Scandinavia) second home located within a short flight of their RESIDENT BUYERS DIFFER IN guarantee, and a possible VAT rebate of up rural views of vineyards and olive groves primary residence, which offers strong rental Forte dei Marmi WHAT IS YOUR OUTLOOK FOR Foreign-born along with French domestic buyers who to 20% for those open to a rental solution. THE SWISS LAKES? prospects and the promise of a good climate, appeals to family buyers seeking the full THE MARKET? residents account for around one in five of our prime Milan culture, and landscape acts as a strong pull. Tuscan experience. Resident buyers tend to have larger budgets; general report, this material does not necessarily represent buyers. Buyers from the Middle East, the US they will be in possession of their residency The market slowed post 2016 when the OECD’s and even Asia are also displaying a greater WHAT’S YOUR OUTLOOK Venice 2,063,428 Northern Europeans are active, particularly those WHAT’S YOUR OUTLOOK FOR 2018? permit, be aware of the different cantonal convention on Swiss banking secrecy was first appetite for French real estate. FOR 2018? from within the Eurozone who have been able mooted, but in 2017 we saw renewed interest as Lake Como tax rules and usually have a clearly-defined The confidence that was cultivated in the to take advantage of moderating prices without Opportunities abound. Buyers are arguably education, lifestyle and personal security moved to search area. Interest in recent months is WHERE ARE THE HOTSPOTS? market during 2016 continues to gain being penalised by any currency shift. facing the best quality stock for some Florence the fore as key motivations amongst buyers. years and where prices have plateaued strongest within the CHF2m and CHF8m France is fortunate to have many hotspots momentum and as France celebrates a The love affair with all things Italian continues for Argentario Lugano and Montreux, as well as other areas that we expect the market to gain traction as price bracket. Previously, the upper end of – from beautiful cities and charming hilltop record 2017 when over one million properties many Americans. In the three months to March offer lakeside views and dual season appeal, will the view of Knight Frank LLP in relation to particular inventories diminish. the price bracket would have extended to changed hands, we expect transaction Western Liguria villages, to glamorous beaches and award- 2018, online property viewings by prospective CHF10m but this has reduced slightly, partly increasingly come under the spotlight. Although Population volumes to rise further. Against a backdrop buyers in the US accounted for 11% of all Currency matters. Where UK vendors are the properties currently on offer are of good quality winning ski resorts. Our carefully considered Chianti because of the more stringent assessment of associate network of offices across France, of historically low interest rates, rising house searches on Knight Frank’s website. looking to return home we are seeing a greater in these areas, there is limited volume, which is Vald'Orcia and lump sum taxation, which came into force on 8,482,200 covering Paris, the Côte d’Azur, Saint Tropez, price inflation, growing economic and political flexibility on price as the recent strengthening southern Tuscany putting pressure on prices. Of note is the uptick in interest from Australia 1 January 2016. the Luberon and Alpilles, Gers, Espace Killy, stability, France looks to attract global wealth of the pound provides them with some room 0.4% and New Zealand. Many applicants are semi- Lucca and Pisa The Swiss Franc remains a go-to safe haven that will allow its real estate markets to thrive for manoeuvre. Les 3 Vallées, Megève and Chamonix, are retired couples with children working in Europe The budgets of non-resident buyers are currency and despite its strength a number of KnightFrank.com EXCEPTIONAL PROPERTIES IN FRANCE AND SWITZERLAND Maremma properties or projects. Reproduction of this report in whole through 2018 and beyond. Indeed, as global the local experts in these very hotspots. The seeking a long-term summer base to use for Ease of access. Northern Italy is appealing significantly lower at around CHF1m to buyers cite a desire to hold an asset in a non-US international appeal of these destinations uncertainty prevails, France and its rich family get-togethers. City apartments in Florence to buyers keen to explore Switzerland and CHF4m. Most make their first acquisition at dollar and non-Euro denomination as a key Paris 12.0% St Remy de Provence 5.0% Chamonix 4.5% Val d’Isere 3.0% Cannes 2.7% Meribel 1.6% Courchevel 1850 Megeve -0.5% St Tropez -5.0% Evian -10.0% Umbria THE GLOBAL PERSPECTIVE ON PRIME PROPERTY AND INVESTMENT ensures a constant flow of eager tourists cultural tapestry remains an attractive and and Rome are popular; particularly those easy to France, either for ski breaks, outdoor pursuits this price but then increase their investment knightfrank.com motivation behind their purchase. I don’t see this Source: Swiss Federal Statistics Office, State Secretariat for Migration. which helps to underpin the underlying market compelling investment and lifestyle choice. Source: Knight Frank Research maintain as well as lock up and leave. or for cultural reasons. Source: Knight Frank Research having familiarised themselves with an area. changing any time soon. As at 31 March 2018 or in part is not allowed without prior written approval of Wealth Report France Insight 2018 Italy Insight 2018 Swiss Lakes Insight Alpine View 2018 Knight Frank LLP to the form and content within which it Update Sept 2018 2018 appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, Knight Frank Research Reports are available at KnightFrank.com/Research where you may look at a list of members’ names.