Buying ski property in the French Alps
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In the market for a French ski chalet? The choice can be bewildering. With over a hundred resorts, France offers an unrivalled selection of ski property to suit all types of investor and winter sports enthusiast (albeit at prices higher than the average), so it pays to do some homework and understand the market before taking the plunge.
With an estimated 1.3 million Brits taking winter sports holidays in the 2005-2006 season, the total market has grown consistently over the last five years, which is good news for prospective buy-to-let purchasers. Constant demand from skiers for better accommodation, luxury facilities and quality finishes dictates the high calibre of developments now being built, putting the "rabbit-hutch" chalets and apartments of the past firmly in their place.
Developers are also buying up older, less attractive apartment blocks and hotels and transforming them into smart, revamped, chalet-style buildings.
Conversion projects are the order of the day, and some companies are taking an innovative approach by providing accommodation on sites that have been traditionally shunned: MGM is currently building 180 apartments on a near-vertical rock face near Grand Bornand, as well as a brownfield development which will replace old shops with new homes in Les Houches.
Although the Alps are a skiers' paradise, the region can be enjoyed in the summer too. The mountain climate means that visitors can enjoy the sunshine and make the most of activities such as hiking, mountain biking, canyoning and paragliding, so check a resort to see how it performs in both seasons, bearing maximum personal use and/or rental potential in mind.
Martin Sadler of Assetz Ski comments: "For investors to achieve yields on their purchase, year-round rentability is key. Ski properties tend to give high returns over the winter season but it's useful for buyers to consider what else the area can offer. These days, people expect much more from a resort than just the slopes. A good range of bars, restaurants, shops and cafes is now a prerequisite rather than a welcome extra, and non-skiers expect activities like snow-shoe hiking, sledding or off-piste walks."
He continues: "The physical landscape of ski resorts means they're often equally stunning in summer, attracting visitors who are into climbing, fishing, white-water rafting and the like; to pull in summer tenants, make sure there's plenty on offer in the way of outdoor pursuits." Villages with all-year activity tend to be at a lower altitude and may consequently have a shorter ski season, so check that there are good links to other, higher runs via lifts or cable car to extend your winter rental weeks.
Proximity to an airport with low-priced flights has considerable impact on ski property prices, and many resorts in the French Alps are within an hour's drive of Geneva, making long weekend breaks practical and affordable. For those who prefer to drive, it is roughly an eight-hour trip from the Calais Tunnel terminal down the motorway, or from December to April, the high-speed TGV train whizzes from London Waterloo to Aime-La-Plagne, Možtiers and Bourg-St-Maurice.
The long-established, most popular resorts such as Chamonix, Val d'Isere, Courchevel and Meribel have become very expensive; expect to pay from €7,000 per square metre in Chamonix, and a jaw-dropping €15,000 to €20,000 per square metre in Courchevel. For purchasers with deep pockets, MGM has recently completed four fully fitted luxury apartments within a chalet renovation project in Chamonix, at the foot of the Aiguille du Midi ski lift, one of which is a 200-square-metre three-bedroom penthouse occupying the entire top floor, on offer for a cool €2.3 million (£1.6 million). Alternatively, in Megeve, a tailor-made chalet by French dream-home builder Grosset Janin will set you back €1.4 million (£930,000).
Understandably, the race is on to find reasonably priced spots that still have good access to airports and other resorts, plus a good atmosphere year-round. Mark Paterson of Maison Individuelle offers a tip: "The smart money buys into a resort that's due to have a new lift installed, or a link to a neighbouring area put in, or where general renovation is planned. For example, there's a long-term link-up planned between Megeve, Praz-sur-Arly, Les Contamines, Les Saisies and other outlying villages, which will give skiers access to some 800 kilometres of runs. Or there's Chinaillon, part of the Grand Bornand resort, which is scheduled to join up to La Clusaz."
A recent article in the Daily Telegraph flagged up Vallorcine, a small village in the Chamonix valley as a potential hot spot. This tiny resort near the Swiss border plans to transform itself into a high-end holiday destination virtually from scratch, with 400 apartments, two hotels, shops and restaurants scheduled to be built over the next few years - and as this is rumoured to be the last place in the Chamonix valley to be developed, it could well be a good investment opportunity.
An important aspect of buying property in the Alps is its potential for capital appreciation, and on this front, the Alps continue to perform strongly. For the period 2002 to 2005 developers are citing figures of 50 per cent for the Trois Vallees, 65 per cent for Courchevel and 75 per cent for Tignes, while at Chamrousse, 45 minutes from Grenoble, capital growth of 23 per cent is cited for 2005 alone - but of course, buyers should always verify developers' claims and do their own fact-finding before making an investment.
Buying off-plan gives purchasers more opportunity to turn a pretty penny. Many alpine constructions are sold via leaseback, a scheme devised by the French government to increase the supply of accommodation in popular resort areas. Buying under leaseback means that the VAT (19.6 per cent) is rebated to the purchaser, who leases the apartment back to a management company in return for guaranteed rental income, for a period of (typically) nine or eleven years.
MGM is currently marketing new homes in Champagny en Vanoise on a leaseback-only basis. Due for delivery in time for the 2007 ski season, the five Savoyard-style chalets will comprise 80 two-bedroom apartments and facilities including an indoor pool, sauna and jacuzzi as well as steam and fitness rooms; prices start from €275,000 (£186,000). Chambery airport is an hour's drive away, but interesting, too, is the proximity of the Bellec™te glacier: "An altitude of 3,000 metres helps ensure snow and a long ski season, generally from December to May," observes MGM's James Rodwell.
In a similar vein, Europe's largest glacier at Les Deux Alpes (France's second oldest ski resort) provides summer skiing from June through to September; Assetz is selling leaseback apartments within this popular, traditional resort with guaranteed rental yields of 4.3 per cent and a personal usage option from €250,000 (£169,000). Also worth a look is Canadian developer Intrawest's new project at Arc 1800, the largest and most cosmopolitan village of Les Arcs. Launched in January 2007, Edenarc 1800 will overlook the present resort and benefit from the existing infrastructure, offering 330 units within a hotel and two residence de tourisme blocks, with apartments available to purchase outright or through leaseback via Erna Low.
To bag a brand-new home, you'll need to keep your eyes and ears open, and reserve up front; sign up for developers' email newsletters and be first off the blocks when a new development is released. If resale is more your style, get your finances sorted out, make friends with agents who specialise in your preferred area and be ready to act fast; local building restrictions mean that older homes are changing hands quicker than you can say "Jean-Claude Killy".
Buying a ski chalet - what to look for
- Ski-in, ski-out access
- Good access to airports
- Proximity to lifts and other resorts
- Attractive, well-built homes with quality finish
- Space - is there enough?
- Resort altitude and snow record
- Range of facilities within easy reach
- Year-round leisure opportunities
- Good capital growth and rental potential
First published in Homes Overseas Magazine February 2007.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
