Lifestyle

Investment Potentials In Ski Resorts

Investment Potentials In Ski ResortsSkiing, like golf, is sometimes considered a game for the affluent. The best golf courses (St Andrews, Augusta National) often feel ultra-exclusive (in more ways than one) and property in the most elegant of ski resorts — in Vail, Colorado or Gstaad, Switzerland — is outrageously priced. That makes the ski resort, perhaps, the ultimate lifestyle investment.

I Ski, You Ski
While some spots are indeed swish (Whistler is home to Four Seasons Residence, and US$10, $20 or $30 million price tags are not uncommon in Vail) it’s not all champagne and caviar all the time. Ski resort areas offer properties ranging from affordable to astronomical. “The spectrum of clients who buy high class real estate near the ski zones is very wide,” says Peter Frigo, a master licence partner at Engel & Volkers Switzerland in Geneva. “[There are] young entrepreneurs looking for a place to relax, away from the daily stress. Because the federal government has set an annual quota of permits for non-resident foreigners, many well-situated EU-families move to Switzerland. Pensioners who saved … and like to enjoy life with a second home,” represent a variety of price points for purchasing ski property.

In addition to tony Vail and Gstaad, locations like Jackson Hole, Wyoming, Telluride, Colorado, Park City, Utah, Whistler, British Columbia, Banff, Alberta and frequently Niseko, Japan regularly land on top ten lists and “ideal” holiday investment recommendations. But they’re not the only game in town. The east coast of the US, parts of Ontario and Quebec, Austria, Northern Europe and even South America all boast ski spots. A lot of that has to do with ski resorts’ increasing viability as year-round destinations. Even India — home to some pretty high mountains it’s been said — has flirted with bolstering its fledgling ski resort industry, as has Bulgaria in recent years. It’s smart tourist money for the communities, very often small towns that rely on travellers, and smarter money for property owners with prime real estate in prime locations.

According to research by Savills, transactions in the Swiss Alps grew by nearly 60 percent in the first half of 2013, averaging 5 percent price hikes over 2012. Limited supply and regulation in some markets is only adding fuel to the fire. While there’s something for everyone, HNWIs looking for lifestyle properties, status buys as well as wealth havens and, finally, vacation homes are driving the market.

Old World Charm
The spike in the Alps is largely due to the fact that despite being among the priciest ski property in the world, the area remains the cream of the ski crop. Niseko has better snow, and more of it, the Rockies can be higher but the European ski vibe is the one most investors aspire to. Megeve, Val d’Isere, Chamonix and Courchevel in France and Gstaad, Verbier and Zermatt in Switzerland still reign supreme. Prices held steady in 2012 for all locations, with some seeing modest gains. So what is it that makes a given location an ideal one? Infrastructure? Growth potential? A chic village nearby worth being seen in?

“All of the mentioned factors,” says Frigo Speaking of Switzerland, “The prices of luxury properties vary from CHF6,000 to CHF12,000 per square meter (HK$4,700 to $9,500), depending very much on the location. The prices of small two-room apartments in the ski area start at CHF400,000 (HK$3.4 million). Luxury houses starts at CHF 2 million (HK$17 million) where the sky is the limit.”

Frigo notes that prices have grown substantially in recent years, but nonetheless, ”The demand of a nice condominium in the Alps is still substantial.” He points to Andermatt in southern Switzerland and the development, The Chedi Andermatt, that’s getting all the attention (see International). Exemptions to foreign ownership laws have hurled the project onto the investor radar in a big way. And while the jury is still out on French president François Hollande’s tax policies, Switzerland remains a safe choice. “In contrast with many other countries the financial crisis hasn’t had a negative influence on the complete Swiss real estate market. On the contrary, the Swiss market is characterised by stable, even lightly increasing prices, an excellent sales market, high quality real estate and no speculative property bubble — different than in the USA. Real estate, especially at the famous Swiss ski-resorts, is a solid and profitable investment, at least at longer term notice,” states Frigo.

New World Zing
But almost as many investors like the price points of emerging or new world destinations in North America, Eastern Europe and Japan. For obvious reasons, Lake Tahoe, on the California/Nevada border, is a perennial favourite, and all eyes are on Revelstoke Mountain Resort in BC, a massive residential project set for completion by 2020. Whistler is holding firm with Asian purchasers, and an April, 2013 survey by Sotheby’s International Realty Canada stated, “The entry-level cost for luxury single family homes in these four-season destination regions [Whistler, Sun Peaks, Mont Tremblant] range from CAD1 to 2 million. The minimum square footage of these homes range from 3,000 to 4,000 square feet.”

The picture in Bulgaria and Japan is considerably more welcoming, if not as luxurious — yet. While Bulgaria currently wobbles, Niseko gains momentum each passing year, and with the Japanese economy recovering on the hells of Abenomics and the yen at a favourable rate, Hokkaido could be home to the next great ski boom. Then there’s attitude. Europe is still for skiing, whereas those interested in that other great winter sport — snowboarding — are likely to gravitate to North America and Japan. Whistler was nearly built on boarding, and Niseko has become the premier place to stop for that sport among Asian travellers. Research by Hong Kong investment firm IP Global indicates that Niseko property prices have increased steadily: a one-bedroom unit was roughly twice the price in 2012 as it was in 2009. Regardless of preference, ski resort towns have caught on simply because of their versatility. There’s only so much you can do on a beach but there’s a whole bunch to do once the snow melts. Or falls.