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Why the luxury property market is stronger than ever in French Alps

Posted by FindHomeAbroad on December 4, 2018

Very strong demand for high-end French ski properties

Even if the 2008 financial crisis is still present in the minds of many potential property investors, the French Alp property market seems to be oblivious to this cautiousness. The demand for luxury high-end Alpine properties in France is in strong demand…so much so that there is more demand than offer…especially in these top-end ski resorts like Méribel, Courchevel, Val d’Isere and Megève. Even famous ski resorts like Alpe d’Huez and Les 2 Alpes seem to lack more high-end real estate. The new 5* Daria-I-Nor in Alpe d’Huez is an exception, and at under 5,000 euros per sqm, it is indeed an excellent investment (offers guaranteed rental income tax-free combined with a few weeks of personal use each year). In Les 2 Alpes, we have the Chalet du Soleil but already running out of apartments, so should sell out soon. Due to be launched soon is a new development similar to Chalet du Soleil but in Alpe d’Huez (expected to launch in early 2019).

High-end Alpine properties in the top ski resorts are snapped up by Europeans in general, French residents make up between 45-60% (45% Courchevel and 60% Megève) of the buyers followed closely followed by British clients who make up the biggest group of luxury Alpine real estate buyers. Incidentally, Brexit has did not affect British buyers and their love affair with high-end properties in high-end French ski resorts.

Exclusive ski properties for sale have confirmed their unchallenged status to French and non-French investors. Demand is becoming much higher than the offer available in these French ski resorts. However, potential clients do want to pay the right price and not more and often the rental potential is decisive. Most owners nowadays see their ski property as their Alpine home but also as an asset which should be used to generate income. Laws in France regarding furnished holiday lets are especially generous thanks to the amortisation system coupled with deductible mortgage interests (unlike in the UK), not to mention being able to claim back 20pc VAT on purchase price often. Often new owners of a French ski property let out can generate tax-free rental income for 10-15 years (contact us for more info).

blog about french ski property market

Property prices in top ski resorts can be elastic, to say the least…

Property prices can vary greatly even inside the same ski resort, and we see for example ski property prices ranging from 15,000-25,000 euros per sqm in Courchevel (resale apartments), in Meribel or Val d’Isère more affordable are resale ski properties between 7,000-15,000 euros/sqm. Now, of course, these values are for resale properties which can include 20-30-year old ski properties and prices are higher for that new-build ski property brand new just launched on the market. Chalets in Courchevel, again resales, are around 30,000 euros/sqm and in Megeve between 15,000-25,000 euros/sqm. In Les 2 Alpes, Alpe d’Huez, Tignes and other high altitude ski areas like Paradiski (Les ArcsLa Plagne), prices vary between 5,000-12,000 euros/sqm for new-build developments towards the higher-end bracket.

Forget small surfaces like studios and small 1-beds…unless you cannot afford better…

At Findhomeabroad, we have seen this trend for many years back to 2007, we started noticing bigger apartments getting snapped up quickly and smaller units (studios and 1-beds) really struggling to sell (unless priced rock bottom…). To be honest, in most new-build ski developments, usually bigger apartments (3-bed +) make up only 10-20% of stock but still, you can see clients being much more decisive for the more extensive units. Also, in the 70s-the 90s, many French developments in the Alps built a majority of smaller units as there was strong demand from the French market. This has now changed, and funnily enough, you can see property purchase trends launched by British buyers becoming the norm for French buyers a few years later…Another feature is the en-suite bathroom and more WCs (at some point, we still saw 3-beds with only 1 WC…quite unacceptable for a Brit, and we agree….).
Now small surfaces can still be fine for personal use and as an affordable pied-a-terre in a ski resort, just that you will struggle more to sell it on if you do decide to at some point. However, small surfaces are in demand when it comes to extending the surface of an already owned apartment next door.

Pound Sterling value

Even if, over five years, the pound sterling has lost 5.48% value to the Euro, the super low French mortgage rates have certainly made up for it. When two years ago we had fixed rates of nearly 3%, at FindHomeAbroad, we can today secure 1.9-2% fixed over 15-20 years. Coupled with rental income in euros more popular than ever, it certainly makes sense!

New-build ski properties are more popular than ever

With prices in Courchevel (20,000-35,000€/sqm), Meribel (12,000-20,000/sqm, Val d’Isere (15,000-30,000/sqm), buyers love it when this exclusive new-build real estate also offers Spa facilities and comes with setting up rental management for combining personal use with rental income (around 3-4% return). More than a traditional buy-to-let investment, it is for the pleasure of enjoying your property in the mountain, pay-off most of the running charges, and one day sell or give the capital to the children.

We always say at Findhomeabroad that if you want an easy property investment, you are probably better off investing in student accommodation in Manchester…but then again,  you won’t enjoy the breathtaking views and ambience of a top ski resort in the French Alps!

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