The recently published Knight Frank Wealth Report 2010 looks at the state of the prime property market worldwide, using sales data for 2009 from its international network of agents.
So how has prime property – “the most desirable, and normally most expensive, property in a defined location” – in the Alps fared? 5 ski resorts feature in the Report, the 5 big French players of Courchevel, Meribel, Chamonix, Megeve and Val d’Isere. The report concludes prices have fallen on average by 12%. The question is why?
Ultra cheap finance, which seems to be supporting the upward performance of prime property in cities, particularly in Asia, does not seem to have the same effect for ski resort property? With the European base rate sticking at 1% for the 10th month running, there’s never been a better time to raise property finance. However the same low interest rates have protected many sellers and reduced the amount of property coming onto the market. Buyers expectations also play a part; those expecting to pick up a “bargain”, have been largely disappointed as few sellers have been forced to sell. Therefore the price drop is based on limited prime property transactions.
Alpine developers also remain reluctant to realign their prices with the resale market. Anecdotally, owners who bought a new-build property in the last 5 years are struggling to sell it for more than the same price today and so are holding off.
Pre-crunch, buyers were happier to invest for lifestyle reason; now the desire for capital growth plays a bigger role. Prime property prices in the Alps may well stay where they are until buyers look for something other than an investment opportunity.
So what is currently good value in the Alps?
- 1, 2 and 3 bedroom resale apartments in Chamonix
- chalets in Meribel; and
- property in Villars, Vaud, where sales restrictions to foreigners are more relaxed.
