RESIDENTIAL RESEARCH
SKI PROPERTY REPORT 2018-19 ASSESSING PROPERTY MARKET CONDITIONS ACROSS THE FRENCH AND SWISS ALPS
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 France. 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. Swiss Alps 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% Chamonix (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 Courchevel 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 COMBLOUX 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