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Ski slopes – are prices on ice or are they sliding?

publication date: Feb 17, 2010
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SkiingSkiing has become a passion among the British. Unfortunately Britain is not exactly well provided with snow – or at least, not reliably. For us, ski properties overseas are always in demand. The recession, though, meant that estate agents selling ski properties were facing an uphill task in 2009. But things have now picked up, according to Jeremy Rollason, MD of Alpine Homes in association with Savills. “Things changed in July,” he says. “The last thing on people’s minds before then was buying second homes, until they knew where they stood. It looks as if the bad news is mainly out now, and we sold quite a few properties through the autumn. But that’s not to say we’re back to the levels of the boom years.” Where is cool?

Alpine Homes deals with the two traditional ski markets for British buyers - France and Switzerland - as well as with Austrian property. Rollason says the Alps are still the favoured market for British buyers, and for a good reason. “The Alps are very accessible. People go to the US skiing, but it’s a long way and has become expensive with the fall of the pound.”

He points out that Colorado and the major US resorts are no longer cheap, and a property boom in British Columbia has also made valuations in Canada look stretched. “Five years ago people were saying France is expensive, let’s go and buy in North America, particularly in Canada – but we’re not hearing that any more.”

In France, he believes prices have fallen by 20 per cent at least, and in some cases by 50 per cent. That means, “The French Alps are looking better value than they have done for some time.” However, a lot of new developments were stopped during the recession, so it’s difficult for agents to tell what is happening in terms of pricing.

He also notes that each resort is different. For instance Courchevel hasn’t fallen by the same margin as more tourist orientated resorts. “The top end, Courchevel and Megeve, has been more resilient even than Chamonix – thanks partly to Russian buyers.” But there are certainly deals to be done in the French Alps, with some developers cutting prices by 50 per cent to shift inventory.

Switzerland has never been an easy place for foreigners to acquire property, says Andrew Hawkins, head of international at Chesterton Humberts; ownership is tightly regulated and foreigners need to apply for a permit before buying. Howeve that is changing in 2010, when the federal government will hand over responsibility for managing foreign ownership to the individual cantons. That, together with a five year property holding requirement, has helped to smooth out the property market, so that Switzerland never experienced the boom some other destinations did, but also hasn’t seen the kind of price falls of other markets.

Chalet properties
Jeremy Rollason says Swiss business is booming at the moment. “Our business is normally 25 per cent France, 25 per cent Austria, and 50 per cent Switzerland,” he says, “but at the moment the percentage of people buying in Switzerland is much, much higher – it doesn’t have these property market fluctuations that other markets have had. People are looking for a safe haven.”

It’s chalets that are selling best, rather than apartments, since most of the buyers are people with both cash and families, looking for larger properties.

Austria is the least well known of the three Alpine destinations, but has good build quality and excellent ski resorts, representing good value compared to better known destinations. Jeremy Rollason says, “Austria wasn’t particularly well frequented by Brits, traditionally, but in the last five years or so it’s become more popular. It’s exceptionally good value still – anything up to 50 per cent cheaper than France and less than half the price of Switzerland.” He notes that the country has a fifth of the total world market for overseas skiing trips – up from 17 or 18 per cent last year.

Austria is also a year-round destination; half the tourist nights at Zell am See and Rauris, for instance, are in summer, against less than 40 per cent in the French Alps. “If you’re interested in summer use,” Rollason says, “Austria is very much the place to look, particularly for the more value orientated buyer. A quarter of a million euros goes a long way in Austria – in Val d’Isere and Les Arcs, with that kind of budget, you’d struggle.”

The newer ski markets of Eastern Europe have been a mixed bag over the past few years. Bulgaria has crashed and burned, Slovakia continues to offer cheap property but perhaps slightly less interesting ski resorts, while Slovenia is recovering after seeing prices drop over the last two years.

Frances Sargent of Slovenian Properties (www.slovenianproperties.com) recommends Slovenia to families. She says “It’s great for family skiing. There are loads of little ski schools – they’re absolutely priceless, and all the children here learn to ski at school.” With year-round facilities, mountain climbing and lake based watersports in summer, and spas close to some of the resort, it’s also a market with good potential for summer lettings.

Sargent says Slovene buyers have supported the bottom end of the market, freeing up chains. She says it’s difficult to assess the true level of prices; many developers have kept their old, higher prices on their websites though they are willing to do deals. “Some properties are sold at a considerably lower price without the new price ever being listed on the website. This is where a good agent can play an extremely important part,” she says.

The market has definitely polarised, she says. “People are looking either at the low end, under EUR 130,000, or the real luxury end of the market.” Italians are buying – Slovenia is a good weekend destination they can drive to – as are Belgians and Dutch, in addition to Brits. There is still a healthy number of investment buyers, too, mainly out looking for bargains where over-building in some of the resorts has led to an overhang of property and the chance to get a bargain. There are some interesting traditional properties available, too, such as a four bedroom farmhouse for EUR 100,000 – though it does need some refurbishment. While Slovenia isn’t outrageously cheap, Sargent says the cost of living reflects “normal” euro prices rather than the sort of prices you might pay in Chamonix or Megeve, and the skiing facilities are world class.

Properties on saleIn Bulgaria, prices in the main resort of Bansko have fallen by as much as 50 per cent, according to the Bulgarian National Real Estate Association. There is now less property coming on to the market, as developers have cut back their building programmes, and construction companies are now looking for more realistic prices from buyers. This makes Bulgaria look extremely cheap – yet interest in the destination has continued to fall this year, partly as a result of the well publicised problems with over-development and aggressive sales techniques in 2007 and 2008, according to Michael Axelrod at mortgage specialist Conti. He also warns it’s difficult to get financing for Bulgarian purchases, so this looks like a cash buyer’s market at the moment.

Long haul ski destinations in Canada and the US have long attracted a certain amount of British interest. Certainly if you believe the global warming pessimists, ski resorts under 1,200 metres – and that includes many of the key European destinations – could have their days numbered. That’s certainly not a problem in the Rockies, home to the USA’s best known – and most expensive – ski resorts.

Even in Colorado, though, prices have come down. Colorado skier numbers were down 5.5 per cent last year, according to trade group Colorado Ski Country USA. This year, with many resorts increasing what’s offered in their ski passes, or reducing the price of passes, early sales appear to be up, but that hasn’t made much impression on the property market. According to Karren Barrocas of Colorado Ski Real Estate, it’s a buyer’s market, “and the supply is much larger than the demand, with a much larger inventory than we have seen for many years.”

Prices remain high; for instance East West Partners is currently selling the Water House on Main Street in Breckenridge, with one remaining one bed apartment at USD 975,000, and three-bed apartments starting at USD 1.45m.

A lower priced and slightly less spectacular skiing experience is offered by New England, where New England Concepts is currently offering a number of developments in Maine and New Hampshire. A three bed duplex lodge in the Rangeley Lakes region of Maine, for instance, close to the Saddleback Mountain ski area – the highest skiing in the region – costs USD 375,000. With the autumn foliage providing a second high tourist season, and summer rentals also buoyant, New England homes look good value compared to Colorado, and are of course a few hours closer by plane. Here, there are a few bargains, though prices appear not to have fallen by as much as in Colorado.

However some of the most interesting ski properties may be in places most investors would never look for them. Think of good ski destinations and you probably wouldn’t pick Turkey and Italy. Luca Catalano, director at RealItalia, believes the attractions of Italy’s ski resorts have been undersold. Valle d’Aosta is highly accessible – an hour from Turin airport – and offers superb skiing at well below French or Swiss prices, for instance. Gemma Knowles of GKitalianproperty. com also recommends Italian ski resorts. Buy a property in Val d’Aosta, she says, and you can ski in France or Switzerland – the border’s close – while still benefiting from Italian prices. Prices for apartments in the Aosta, she says, are available at EUR 180,000, so this isn’t competing in the same budget market as the Eastern European ski resorts, but none the less looks good value compared to Courmayeur or Chamonix.

Turkey, sun-sea-sand destination par excellence, is even less well known as a ski destination, but that could change. With the pound weak against the euro, non- Eurozone Turkey has become a favoured destination – tourist numbers increased by nearly two per cent in the year to October 2009, according to the Ministry of Culture and Tourism; tourists can stretch their money that little bit further as the pound has held its value against the lira.

Slovenian propertyUludag is the traditional resort for Turkish skiers, near Bursa, but there are now a number of ski facilities being built close to the established beach resorts. For instance, there’s a ski resort being constructed at Seki, in the mountains behind Fethiye, though this looks unlikely to be completed till next year. At Tahtali, near Antalya, a 4 km long cablecar run allows holidaymakers to swim in the morning and ski in the afternoon. Villas near Kemer can still be bought for substantially less than EUR 100,000, which together with a low cost of living and cheap flights from the UK makes this a compelling budget property proposition. However, most of the ski runs are apparently on the easy side, so experienced Alpine skiers might find the Turkish resorts disappointing. On the plus side, snowboarding is a highly popular and generally well served market in Turkey.

However, no agents yet seem to be selling Turkey proactively as a ski destination to British buyers – it’s still the sun, sea sand beat as far as most of them are concerned. Could this be an opportunity waiting to be discovered? Certainly the currency situation, together with the buoyant Turkish economy (surely the only country to see its sovereign debt rating actually go up this month!), suggest that from an investment point of view, buyers could do a lot worse.