The Brexit Effect – Bad for France, Good for Switzerland
The ski market in 2015 and early 2016 benefitted from purchases by Brits making the most of a weaker Euro. Since the “Brexit” referendum, the decline of Sterling and general uncertainty has created an atmosphere of “wait and see” among UK buyers, which may continue into 2017. The market continues to see an increase in buyers from Asia and the Middle East, looking for a home in the mountains for the summer months, and to rent out in the winter. Switzerland seems have shrugged off any “Brexit” woes and despite the strong Franc, the most exclusive Swiss resorts continue to perform well thanks to the second home cap and purchasing rules for non-residents. Prices in Swiss ski resorts will stay strong as stock remains low.
Mortgage rates stay appealing, but may rise soon
French mortgage rates have been at historic lows for some time, though there are rumours the banks will raise rates in early 2017, due to increased borrowing costs. For now buyers – including cash buyers – will continue to take advantage of low rates, to hedge against ongoing currency volatility and to lock in a long term fixed rate.
Go East – from France to Austria
While the French Alps has been the dominant market for ski property purchase, prices in the Austrian Alps – at approx. 30% lower – are too good to resist. Austrian ski resorts are continuing to invest in their infrastructure and non-skiing activities to extend the season. This coupled with an increase of property available to buy in more internationally renowned ski areas such as the Arlberg and Saalbach.
Courchevel no More!
Buyers are no longer happy to invest only for the winter season, turning away from the top-tier winter resorts, such as Courchevel in the French Alps, to villages with a more active annual calendar such as Chamonix and St Gervais Les Bains, also Morzine in the Portes du Soleil. Alongside their programme of year-round activities, these resorts still offer better value for money and better potential for capital gain.
Airbnb’s assault on the holiday rental market in the Alps will advance, continuing to change the traditional rental model of week-to-week bookings to more flexible stays, and reducing the seasonality of the market. Rental is also no longer the “poor” man’s game – the super-luxury end of the market is embracing it too, renting out their luxury chalets with bolt-on services from in-resort concierge, chefs and drivers. Home-swapping will start to go mainstream too as second home owners make use of their quiet weeks in exchange for some holiday time in another country.
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