Peak performance for property in the French Alps

As the 2007/2008 ski season enters the final few weeks of the winter, the alpine property market continues to show positive results in popular mountain resorts. The French Alps have long held great appeal for those seeking to buy ski property and it appears that the British love of the great outdoors has continued to push prices upwards despite a sluggish property market at home.

Recently released reports show that property prices in the ski resorts of Haute-Savoie increased by over 13% for re-sale apartments in 2007, with some mountain destinations showing price growth of over 20% year-on-year. According to figures released by the estate agency association FNAIM, the average price per square metre in the northern French Alps has almost doubled since 2002, and now sits at 4,844 euros.

Property in the French Alps is amongst some of the most sought-after and therefore the priciest locations in France and much of the growth in the past 10 years has been influenced by British buyers. The British now account for over 18% of the property sales in this part of the Alps; 10 years ago their market share was 2%. Property for sale in resorts such as Chamonix, Morzine, Les Gets, Megeve and Samoens is still highly desirable and a distinct lack of land to build on ensures that demand for the French Alps continues to outstrip supply.

Buyers are increasingly choosing the northern French Alps because of the fantastic flexibility a property in this part of France can offer. The region is home to some of the largest ski and winter sports domains in the world, yet less than 50% of annual visitors to the Alps actually come here to ski. The summer seasons can be equally as popular as the winter; with breath-taking scenery, a multitude of outdoor pursuits to enjoy and a hot if sometimes unpredictable summer climate. As a result a property in the French Alps can cater for family holidays throughout the entire year. In addition to enjoying winter and summer holidays in the area, owning a property in the Alps offers great scope for seasonal rentals; enabling owners to really capitalise on their investment and recover many of the costs of their second home. Proximity to a major international airport at Geneva is another strong plus point; low-cost and scheduled flights arrive from the UK throughout the entire year and most resorts in the Haute-Savoie region of the French Alps can be reached within 1 hour of the airport.

The future of any mountain destination really hinges on its ability to anticipate and adapt to client needs. Property hunters in today’s market are buying into a lifestyle product; they want to buy a ski property in a resort that has retained its alpine charm, that offers access to good and reliable skiing but also has plenty to enjoy in the summer, with lots of character and a distinctly old alpine French feel. The property needs to be a spacious and comfortable mountain retreat where the whole family can enjoy relaxing short breaks and longer stays. The northern French Alps and in particular the Haute-Savoie region are well matched to buyers’ requirements and this winning formula is reflected in the impressive price increases experienced by many of the mountain destinations in 2007; the price per m² in Flaine/les Carroz has leapt up by 23% in the past year, La Clusaz by 22% and across the Evasion Mont Blanc ski domain by 22%.

With such high demand for ski property for sale it is no surprise that one property sale in four in Haute-Savoie is in a mountain destination. The highest concentrations of British buyers across the northern French Alps are in the Grand Massif, the Portes de Soleil, the Mont Blanc region and the Three Valleys ski domains. In these areas property in Chamonix and Megeve has always held a huge draw for British buyers and the resorts of Morzine, Les Gets and Samoens have all developed and grown massively over the past 8 years. These destinations are well placed to offer the quality and size of property that British buyers are seeking, combined with the allure of a year-round and attractive holiday destination.

Developers of new build property in the Alps have increasingly listened to buyers’ requirements and are now focussing on providing more spacious properties with multiple bathrooms. 74% of all apartments sold in the resale market are studios and 1-beds. In new build apartments the most popular purchases are 1 and 2-bed apartments accounting for 72% of sales. The popularity of the larger properties in the new build arena is indicative of changing consumer needs and property designs have adapted accordingly.

The repercussions of the 2007 US sub prime credit crisis and its subsequent impact on the UK housing market has tightened many buyer’s budgets and consequently the alpine property market has recorded a slower pace during the first quarter of 2008. This coupled with the recent fall in the sterling-euro exchange rate has caused buyers to think hard about what they can afford to invest in their alpine property. In recent years ski property for sale in the popular resorts was so scarce buyers had to move quickly and with little or no negotiation in order to secure their property. In today’s market prices are more negotiable, although resort centres are still recording a fast sales turnover and buyers do need to move quickly when they find the right property.

Many of the vendors in the French Alps are British and planning to convert their euros back into sterling once their property has sold. The current euro-sterling exchange rate weighs heavily in their favour and as a result they can afford to be flexible when it comes to negotiation on the asking price of their property. The outcome is that both buyers and vendors are able to achieve a purchase price that they feel is fair and vendors are still able to cash in the benefits of a very healthy capital growth on their second home.

Looking forwards to the remainder of 2008 it is anticipated that property prices in the French Alps will be stable, with some continued strong growth in developing resorts such as Saint Gervais les Bains and Les Contamines. More price negotiation will take place over the coming months and vendors that plan to convert their euros back to sterling will be able to capitalise on the exchange rate, which is not anticipated to improve until the final quarter of the year. Many buyers will consider a smaller property investment initially, with plans to sell and upgrade over the next 2-5 years. Land to build on is increasingly rare and the continued limited supply of property for sale across the French Alps will help maintain a buoyant property market.