Why the Irish are buying ski chalets in the French Alps
Looking to buy a ski property? Wise investors will take note of rising temperatures, writes Diarmaid Condon
THERE were three lean years of Alpine snowfall up to 2017. The lack of white stuff prompted theories that global warming might have made reliable weather for winter sports a thing of the past. However, record-breaking snowfalls in December 2017 helped us forget that scare. All now appears to be back on-piste, at least until the next snow-free period.
Nonetheless, global temperatures are rising, along with snow lines, despite what certain world leaders might say. And the received wisdom from experts in the ski industry is that if you want guaranteed snow, you should avoid resorts less than 1,500m above sea level — or better still, find a resort with slopes above 2,000m to be ‘snow sure’.
Even so, the number of Irish buyers seeking ski properties is on the up. Lloyd Hughes of Athena Advisors quotes a figure of 18pc, year on year, with 92pc of Irish buyers looking for a property they can rent out.
Most Irish interest is concentrated in the French Alps, which offers more bang for your buck than the Austrian or Swiss equivalents. According to Jeremy Rollason, head of the ski division at Savills, Portes du Soleil is a particular favourite with Irish buyers. The area is tucked between Mont Blanc in France and Lake Geneva in Switzerland and covers 13 ski resorts.
More specifically, Irish interest is focused on areas like Morzine and Les Gets. In general, observes Rollason, prices in the region have risen significantly in the past five years, with Morzine up by 70pc, Val d’Isere by 61pc, Chamonix, 28pc, and Meribel, 25pc, the main movers.
Mortgage interest rates are available at as low as 1.5pc fixed for 20 years, with a 30pc deposit. According to Hughes, 80pc of Irish buyers use mortgage finance to buy.
There is good news for those intending to rent. Hughes says: “Under French law, a freehold newbuild or sufficiently renovated property made available for rental and providing at least three ‘rental services’, can apply for a rebate of the 20pc VAT on the purchase price.”
This, he says, is not leaseback, but uses similar laws aimed at ensuring more ‘hot beds’ or occupied properties in tourist areas. It is encouraging many new buyers into the market and is particularly popular with Irish buyers.
Height is everything when it comes to snow — every 1,000m height gain translates to a temperature drop of around 10°C, which means that the loftiest resorts are also the most costly. Resorts like Val d’Isère and Courchevel 1850 — both at over 1,800m — are eye-wateringly expensive at an average of around €20,000 per sqm.
If you’re not in that price range, Megeve (altitude 1,100m) is also regarded as an investment hotspot. It’s not exactly cheap, at an average of around €12,500 per sqm, but in the context of Alpine ski properties it rates as more affordable.
A good rule of thumb is to look for resorts investing in infrastructure and urban planning, suggests Julian Walker of skiingproperty.com. And according to that metric, Megeve is a winner. It is home to three new hotels and has invested hugely in gondolas and snow cannons to lengthen its ski season. Over the next two years, 300 new apartments are due to be completed. It is serviced by Geneva Airport, just over an hour’s drive away, and is two hours’ flying time from Dublin.
The resort of Combloux, 4km away, may be better value than Megeve, suggests Walker. Alvoriaz, 60km or so further south, makes it onto Savills Ski Resilience Index of 55 world resorts as the premier French resort, ranking 14th overall worldwide.
Alpine resorts have had to make much more effort to attract customers over the past two decades. Skiers and hill walkers, by their very nature, tend to be fit and active so resorts have to adapt to appeal to younger visitors by having what is known as ‘millennial-appeal’.
In reality, this translates into adding attractions such as upmarket hotels with wellness centres and spas to broaden their appeal. Resorts have also had to think laterally to fill rooms out of season, offering hiking and other non-snow options. It also gives extra potential to those looking for rental income from their properties.
Some year-round resorts include Les Gets near Mont Blanc, Deux Alpes, Samoëns and Serre Chevalier, where mountain bikers and hikers take over the slopes in summer.
Local estate agents agree that short-term online letting platforms have transformed the rental landscape dramatically. If letting is a priority, choose a location ideally not more than an hour from an airport. This sounds easy, but can be more difficult to achieve when your property is attached to the side of a large mountain.
The financial justification for purchasing an Alpine property is probably not as straightforward as most might like. Be careful where ‘gross income’ figures are quoted — maintenance, community fees, annual costs and taxes will devour a lot of that lump sum. Net figures are a better guide, but can be more aspirational than representative.
While you might not make much from a freehold Alpine property directly, the likelihood is that it will maintain its value over time and be worth a lot more than a deposit placed in a bank at current interest rates. The downside is that property anywhere is a very illiquid asset. If you’re likely to need that money back in a hurry, it’s probably not a great idea. You’ll also end up giving 33pc of any profit you make to the Irish revenue.