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Hitting the Slopes
There’s more to resort properties than sun and sand
| Text : Elizabeth Kerr | Photo : Create Asia Land |
As much as tanning and snorkelling draw investors to subtropical locations, so does skiing. Swap out a villa for a chalet, and blinding sun for blinding snow and you’ve got a completely different resort experience for an equally fervent type of vacationer. Even if you can’t abide the cold, ski properties have the potential to offer robust returns and broader personal use. And a tan.
Skiing has long been perceived as a North American or European pursuit — not necessarily of the people who do it, but of the ideal locations for it. The Alps, stretching east to west across half of Europe, and the Rocky Mountains, spanning two Canadian provinces and six American states, get most of the skiing press and almost all the glamour, and there are indeed ski resorts with properties for sale in all those locations. Intense and comprehensive infrastructures and mature supporting centres like Aspen, Vail, Whistler, Banff, Interlaken and St Moritz make them ideal, but that same maturity makes for saturated markets with little room to grow. They’re not the only games in town.
Lest we forget Norway and Japan have hosted the Olympic Winter Games twice and Russia is making its debut in 2014 in Sochi. The last decade has seen a spike in off-thebeaten- path skiing in India. It may not have Val d’Isere level facilities, but hey … it’s high. It’s also indicative of the variety of locations available with a little work.
Ski properties are not all that difficult to come by particularly if you know exactly where you want to go, and chances of that are high among avid skiers. Purchasers will have good ideas as to what they want aside from piste, and how what how to prioritise those wants. Naturally that leads to the question of whether or not ski resorts are actually a viable investment opportunity. Logically the impression is that ski properties are “hampered” by limited rental potential due to the seasonal nature of the sport, however with resort towns developing at record levels in and around popular mountains, that’s changing. Ski resorts are becoming an allyear destination.
“Compared to city property investments, ski resort properties can often offer higher yields due to relatively lower purchase prices and high profitability during the main ski season,” explains Tingting Peng, Project Manager of Gakuto Villas and Director of Create Asia Land. “Typically purchased as a second home, ski properties offers their owners a vacation getaway when they need it and a steady, robust annual income the rest of the year. Moreover, if properly managed, many ski properties can also cater to off-season visitor demand, further enhancing yields.”
A quick online scan of available properties indicates that purchase prices in prime locations can range anywhere from Peng’s alleged “low” in the decidedly alternative Bulgaria (flats priced anywhere from €25,000) and Quebec for CA$190,000 to mid-range, €2 million luxury around Mont Blanc to US$35 million sprawling eco-estates in Aspen. There are also considerations for ownership — some European countries have foreign ownership restrictions. If you want that bargain flat in Bulgaria, you’re welcome to it, but you’ll need a good lawyer to help you weed through the red tape. Canada and the United States have simpler demands and freehold property is the norm, but they’re mature markets that can get pricey. Developing tourist destinations, like Bulgaria, make sound long-term investments. That’s the key for Bulgaria right now, as Colliers International’s second half 2010 residential market report stated demand in the country is currently driven by “demographic needs.” After a sluggish 2009, demand within Bulgaria picked up in August and September, and domestic buyers are taking advantage of falling prices. Investment purchases dwindled to almost nothing in 2009, but with regard to the urban market, “Encouraging development in consumer confidence, together with the availability of mortgage financing further creates the prerequisites for a recovery of the residential market. It is, perhaps, too early to start celebration, but the light at the end of the tunnel is certainly visible.” Can the investment market be that far behind?
Then there are spots like Japan, that fall somewhere in the middle. Foreign ownership of property is welcomed, and Hokkaido has found itself in the middle of a tourism boom. “Currently, Japan is the premier North Asian ski destination and as such has seen a surge in property investment from overseas buyers, particularly in Niseko, where prices have already been inflated due to insatiable foreign demand the past few years. Hakuba, on the other hand, offers quality real estate investment opportunities at realistic prices,” says Peng.
Peng is referring to Hong Kong-based Create Asia’s Gakuto Villas in Hakuba, twelve Western-style ski villas in the heart of the so-called Japanese North Alps. It was host to many of the events of the Games in Nagano in 1998 and Gakuto Villas — eco-conscious, five-star accommodation — were designed to rival anything in more traditionally popular ski centres. Taking advantage of interest in ski investment, Hokkaido’s trickle down effect that’s increasingly associating Japan with skiing on an international level and four-season tourism Gakuto Villas will be ready for ski season in 2011 and will rent for just over ￥35,000 per night (HK$3,200).
“The Olympics left a thriving apres ski scene, where there is no shortage of international restaurants, bars and traditional Japanese onsens. Several nightclubs can also be found in Hakuba with the biggest situated at Omoshiro Hasshinchi resort hotel,” Peng states. The surrounding infrastructure appeals to buyers with families where not all members may be skiers, and unlike beach resorts, the diversity of ski resort weather is a selling point — not just in Japan, but also in most ski hotspots. Peng: “During the green season, Hakuba has a number of freshwater lakes, some of which have banned the use of engines, making it a popular area for swimming and fishing. Most of the ski resorts continue to operate their ski lifts during the summer allowing access to higher elevations, hiking routes and mountain biking areas.” Hakuba welcomes an average of 3.7 million tourists every year, which translates into a sound rental investment.
Investing in skiing sounds like a fool’s errand if you’re convinced the world is melting, but millions of skiers around the world could tell you otherwise. Ski resort properties have the potential to deliver the same rewards as beach properties, just with slightly different philosophies regarding R & R. Of course if all else fails or you just don’t want to buy anything where you’re guaranteed to get cold, there’s always indoor skiing at Mall of the Emirates in Dubai.
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