The latest report from Savills indicates prices and sales of alpine property is strong, although experts note that the Alps spans a vast region and estimates are broad by necessity. The areas surveyed, which included resorts in Switzerland, Austria and France, show that a large majority of properties are enjoying price stability or outright price increases. Limited supply and a belief harbored by prospective buyers that alpine property is secure investment appear to be driving higher demand, according to analysts. Cheaper credit in the market is also helping attract more buyers to the market, particularly from Russia, the Czech Republic and the Far East. For more on this continue reading the following article from Property Wire.
The last year has seen a turning point in the alpine property market with the majority seeing price stability or an increase in asking prices and prices expected to rise in the next 12 months.
The Alps is an enormous area and generalizations are difficult, but according to the latest analysis report from Savills of 28 resorts surveyed across Austria, France and Switzerland, some 72% are either seeing price stability or an increase of more than 5%.
It also shows that some 42% of the resorts have witnessed an increase in asking prices by more than 5% during the last 12 months.
Principal factors contributing to the hardening of values can be attributed to increasingly tough planning regulations across the Alps thus limiting supply, the report suggests.
It also says that there is a perception amongst buyers that the Alps is a secure place to invest both for lifestyle and income purposes and an increasing realisation that enjoyment of a home in the Alps can be derived all year round.
Austria is one of the few countries to avoid technical recession in the European Union and has seen year on year static or steady price growth in its housing market since 2005. Prices increased 3.1% in 2011.
The report also points out that demand for Alpine property is not just driven by foreign buyers and local agents report that domestic demand is strong for second homes in Austria’s Alps. This helps drive values in an ever competitive market.
‘If we were stock brokers, Austria would currently come with a strong ‘buy’ recommendation, said Jeremy Rollason, managing director of Alpine Homes.
Although house price growth in France has also been strong over the last few years, doubling from 2000 to 2010, prices have since contracted in the last quarter of 2011 and the first quarter of 2012 by 1.2% and 1.1% respectively.
In the second homes market, there was a 7% contraction in the number of overseas buyers in 2011, compared to 2010, although average prices paid were up 12% over the same period. In the Rhone Alpes, covering the majority of French ski resorts, values paid by overseas buyers were up to 27% compared to the previous year, suggesting a strong recovery from price falls in 2009 and 2010.
The analysis suggests buyers should look at the big name resorts such as Chamonix, Val d ‘Isere and Les Trois Vallées including Courchevel, Méribel, and Val Thorens.
Switzerland is also seen as a safe place to buy. Although Sterling has recovered by 25% from an historic low in 2011, the Pound is still 40% weaker against the Swiss Franc than its recent peak in 2007. The Euro was on a similar downward spiral and had also depreciated 40% against the Swiss Franc until the Swiss National Bank intervened and pegged the currency at Chf 1.2/Euro in September 2011.
This has not put off buyers of second homes in Switzerland. The market is also helped by the availability and affordability of credit and new legislation restricting the numbers of second homes in Switzerland to no more than 20%.
‘When the market wakes up to the consequences of the votation in March 2012, restricting the number of second homes to 20% in any given commune, it will be too late to build that chalet in the Swiss Alps that you had once dreamed of,’ added Rollason.
The report concludes that the Alps remains a highly sought after holiday destination in Europe and bolstered by increasing demand from new markets such as The Czech Republic, Russia and the Far East and a continuing supply shortage, an upward trend in values over the next 12 months is expected.
This article was republished with permission from Property Wire.