What does a buying opportunity look like in the Alps?
As the world braces itself for a bumpy economic ride over the next few years, buyers are keen to know how best to ride out the storm – what type of property or resort will prove the most resilient?
2 minutes to read
Below we set out our top five opportunities ski home purchasers should have on their radar.
1. France’s VAT rebate for new homes
Some new-build homes in France offer a potential 20% saving for buyers, provided they agree to let the property commercially for a minimum of 20 years. With required specifications, such as breakfast provision and regular housekeeping, this buying incentive can significant costs.
2. Currency matters
With central banks around the world raising interest rates at different speeds this has a direct impact on currencies. Time your move right and it can result in significant savings.
The Eurozone has kept interest rates lower than other global regions leaving the euro weaker against key currencies, allowing some international buyers to save on their snow-capped investments. For example, a US buyer looking to purchase in the French Alps in October 2022 enjoyed a 15% discount compared to a year earlier.
With currencies across key emerging markets in Asia, the Middle East, and Latin America also pegged to the US dollar, buyers in these markets currently enjoy a similar discount.
3. Swiss Résidences Hotelière
In the Swiss Alps, a law called Lex Weber, introduced in 2013 sets a 20% cap on the number of second homes permissible in each Swiss commune. With most resorts above this level, there are few locations where new second homes can be built.
However, some second homebuyers in Switzerland are targeting a newly introduced hotel-style residence known as a ‘résidence hotelière’. This style of new project is permitted under the Lex Weber regulation as the acquisition is considered a commercial investment, with a requirement that an owner must rent the property when not in use.
4. Futureproofing
Shrewd buyers will do well to scrutinise the investment plans of larger ski companies. A number are announcing significant infrastructure projects across various global destinations. Most of the development plans are aimed at enhancing the year-round status of resorts, ensuring future snow provision, protecting against climate change and boosting tourist numbers – all good news for buyers looking to rent their ski home long term.
5. Landbanking
Larger chalets on bigger plots that can be divided and developed over time provide an opportunity for buyers looking to make a return on their investments. If planning guidelines allow, investors can expand on existing land, providing scope for profits to be made.
In Chamonix for example, Knight Frank sold an older style chalet on a plot of 2,328 sq m for €1.7 million. The buyer subsequently obtained planning consent for two further chalets with a construction cost of c.€850,000 each and a resale value of €1.85 million each.