Hot Chocolate Index & Alpine Property Report 2020

17 February 2020

Ski season 2018/19 – a reflection

Whilst the uncertainty surrounding the UK’s departure from the EU has certainly shaken up the dynamism of the Alpine real estate market, in 2019 Athena Advisers still launched 35 projects and, interestingly, the average selling price has increased by 20.4%.
Why is this? Firstly, when increasing demand meets limited supply, particularly in those prime locations such as le Rond Point des Pistes in Méribel or the front de neige area in
Courchevel, average prices will increase.
Secondly, buying a ski property is often an emotional decision first, as highlighted in our new ‘Reasons to Invest’ campaign. For many, the emotional benefit of owning a chalet – be it quality time with the family, adrenaline-fuelled days on the slopes or just the chance to indulge in the alpine savoir-vivre – outweighs Brexit anxieties. Plus, with French mortgages at an all-time low and incentives such as the VAT rebate programme, there has never been a better time to invest.

New-build and renovation properties

Prices have consistently grown in our key resorts over the past four years with properties in Méribel and Courchevel leading the way. Between 2017 and 2020, the average price per sqm rose by €4,272 and €1,842, respectively, in Méribel and Courchevel.
Interestingly, Méribel has increased the most since our report back in 2017. One of the reasons for that is that the Rond Point des Pistes area in Méribel, the resort’s highest and most prestigious address, has been undergoing an exciting period of renovation.
Old hotels which were used during the Olympics are being reinvented and reimagined as premium ski properties with exceptional on-site facilities and easy access to the ski lifts.
Courchevel Moriond has experienced significant price growth over the past few years too. This is largely due to new-build freehold properties becoming available in
the coveted front de neige area. Previously occupied by hotels, this area now boasts high-end boutique residences and an emblematic 5* hotel has been transformed into a collection of stunning apartments with excellent facilities.

Outlook for 2020

The French Alps real estate market remains strong with average property prices increasing by 3.8% in Savoie and 18.4% in Haute-Savoie over the past 10 years. This is primarily due to the fact that the increasing demand for properties here outstrips supply. In order to help preserve the authentic charm of alpine villages, a reason why so many purchase property in the French Alps, many town halls have a PLU (Plan Local d’Urbanisme) in place which restricts the number of new-build properties. Plus, those which do come to market are often subject to rental obligations.
One of the most visited destinations in France, tourism figures grow year on year in the French Alps. According to the latest statistics, 41.1 million overnight stays were recorded in Savoie Mont Blanc during winter 2018/19. As well as an increase of 3% on the 2017/18 ski period, this makes winter 2018/19 the busiest ski season since monitoring began back in 1995.
Plus, the summer months are becoming increasingly important for the alpine tourism industry with 22.6m overnight stays registered in Savoie Mont Blanc in 2018. This marks a 1% increase on 2017 and a 5.6% increase over the course of five years.

New-build properties: why invest?

VAT Rebate
As the number of tourists increased in the French Alps, so did the demand for high quality tourist accommodation and this demand soon heavily outweighed the supply. This was compounded by the fact that so many French also take their holidays in France, just as they do today. With tourism being such a huge part of the French economy, the French government created a way of incentivising real estate which could be rented out to tourists.
Providing that certain conditions are met, such as offering three hotel-style services, new-build property owners who decide to rent out their residence when not in use have the opportunity to apply for a 20% VAT rebate on the property price.
This incentive is becoming increasingly popular with our clients who buy in the French Alps. Since 2017, Athena Client Relations, our dedicated client services team, has helped our French Alps clients reclaim more than €15m from the French Tax office.

Rentals
Renting out a ski property when not in use is a great way to generate additional income and help the property pay for itself with estimated rental yields of 3-4%. Whilst the winter is by far the best time for rentals, the summer months are becoming increasingly important. Since 2014, the number of overnight stays recorded in the French Alps in the summer has increased by 1 million.

Lower Notary Fees
Another attraction of buying a new-build property over an existing one is that future owners will be able to benefit from reduced notary fees. In France, notary fees are universal and compulsory so it is not possible to reduce your fee by simply shopping around. Whilst existing properties incur a notary fee of 7-8%, those who buy a new-build property will enjoy a reduced fee of 2-2.5%.

Lower Mortgages
With interest rates at an all-time low in France, there has never been a better time to take out a French mortgage. So far in 2020, our sister company French Private Finance has managed to obtain rates starting as low as 1.35% fixed over 20 years (70% LTV) for non-residents.
Thanks to this lower interest rate, buying a €1m property is up to €150,000 cheaper than it was in 2016.

Hot Chocolate Index

One of the most sought-after destinations in the French Alps, it is perhaps not surprising to see that Courchevel 1850 is home to the most expensive hot chocolate. Here, a cup of hot chocolate will set skiers back €7. However, Méribel and Val d’Isère are not far behind with a hot chocolate costing €6 and €5.65, respectively, in the resorts. These resorts were not only home to the most expensive hot chocolates, but they also have the highest average property prices.
At the other end of spectrum, the quaint mountain villages of Châtel and Les Gets had the cheapest hot chocolates. Though charming resorts with access to one of the largest ski omains in the world, Les Portes du Soleil, these figures suggest that these ski resorts can offer better value and costs of living.

DOWNLOAD PDF

Sources:

Athena Advisers data

Meilleurs Agents

Savoie Mont Blanc Tourisme

2019 International Report on Snow & Mountain Tourism

- Added to shortlist

- Removed from the shortlist

Undo