Alpine properties scale new peaks

Recall, if you will – although you’d probably rather not – the long, grinding days at the depths of the pandemic lockdowns. Remember the feeling of being trapped: the world having suddenly closed in, the persistent uncertainty and the lack of any excitement in store? 

Now imagine the antithesis of all that. Picture wide-open skies, fresh air and an exciting and accessible landscape of sparkling white mountains, daisy-strewn meadows and evergreen forests. An overall feeling of health, fitness and opportunity.

The place you’re thinking of may well be the Alps. In the age of Covid, European mountain living has developed fresh appeal. As the first lockdown loomed in early 2020, many owners of second residences in ski resorts beat a hasty retreat from their main dwellings and headed for the hills. That was despite the mandated freeze on many of the customary Alpine delights, from skiing to spa days to fondue evenings.

As the second wave of Covid infections took hold in late 2020, ski resorts in France and Italy were forbidden from reopening. But while their cable cars and après bars stayed eerily empty, the local real estate markets were positively bustling. Amid a snow flurry of transactions, prices in certain locations saw gains.

 

In France, the main hotspots were Chamonix, renowned for its demanding terrain and high-octane nightlife, and Megève, the lower lying but more picturesque resort down the valley. The Knight Frank Ski Property Index results – which are based on a four-bedroom chalet in a prime central location in each resort – show an average price increase in Chamonix of 6.1% and in Megève of 4.7% for the year to 30 June 2021. Average prime prices are €12,500 per square meter (sq m) in the former and €14,500 per sq m in the latter.

Next door in Switzerland, various resorts saw even more buoyant conditions. Unlike its southern and western neighbors, the nation permitted its ski resorts to reopen for the 2020–21 season, reflecting the famous Swiss libertarian streak and the country’s almost religious status of winter sports. The glitzy resort of St Moritz – where prime prices now top €22,700 per sq m – led the ascent in the year to the end of the second quarter, with a 16.5% increase.

Behind these gains are some important shifts in owner and new buyer behavior. Analysis from Knight Frank notes a blurring of the lines between primary and secondary residences. Until recently, mountain properties were a destination for two or three weeks of the year. Now, though, a growing number of people are opting for extended stays.

These changing patterns of use are altering the priorities of new buyers. Previously, it was all about skiing, so what mattered most was proximity to the lifts, slopes, restaurants and bars, says Roddy Aris, Knight Frank’s partner for the French Alps. But now, buyers want a proper base, so what they’re craving is space, and lots of it. To get that, they have to look in slightly different areas.

As well as more space, those planning on longer stays prefer places with more of a year-round population. Some ski resorts can feel rather deserted after the snow and visitor numbers melt away in late spring. The likes of Chamonix, Megève and Les Gets have larger settled communities, which has also contributed to their recent desirability.

Likewise, a healthy range of activities outside of the winter months is also becoming ever more important. Hiking, mountaineering and wildlife spotting have long been staples of Alpine destinations. In recent years, mountain biking and thrill activities such as paragliding and zip-lining have also helped to keep visitors’ adrenaline pumping.

Many of the leading resorts are working and investing hard to augment their appeal. They’re constantly reinventing themselves, with new shops, restaurants, sports facilities and spas, says Roddy Aris. The message they’re trying to get across is: ‘come to live here and you certainly won’t get bored’.

For the wealthiest buyers in this new landscape, spec is proving as important as space. While panoramic views have always been sought after, indoor entertainment spaces such as home cinemas are increasingly in demand. So too are steam rooms and jacuzzies, indoor swimming pools and outdoor hot tubs, along with separate quarters for staff.

A well-located French chalet replete with such features might command a price of around €15 million, with some fetching as much as €25 million. For the moment, such pricing is being supported partly by scarcity. Amid high demand, supply of top-notch homes in resorts such as Chamonix and Val d’Isère simply isn’t sufficient. Some prospective buyers have been asking us to come up with three or four potential properties and then they’ll travel out to view them all, says Roddy Aris. Unfortunately, we have to tell them that’s not going to happen.

One solution to the lack of supply lies in new construction. Some buyers are snapping up older and more tired chalets in good locations with a view to demolish and rebuild. This enables a family to fashion a mountain retreat to their precise specifications, which often involves digging downward to create that state-of-the-art cinema and spa.

Of course, this approach isn’t for the impatient would-be owner. A project might easily take two years to bring to fruition. Local savoir-faire is critical here in the form of a good architect who understands the prevailing regulations, which can vary from area to area. To streamline the process somewhat, plots are sometimes sold with permissions already granted, although this further increases the expense involved.
Supply issues could well ease once the pandemic fades. In their Ski Property Report 2022, Knight Frank’s researchers point out that many would-be sellers of Swiss chalets have held back in 2020 and 2021, choosing to either rent their property out or keep it for family enjoyment. “We are hopeful that we will start to see stock levels recover, albeit slowly,” they write.

That said, the pandemic may have also brought about more lasting changes in habits. Following the successful experiment of mass home working during lockdowns, more flexible, hybrid practices seem set to endure. Relocating to the mountains for a few weeks, or even just taking more frequent short breaks that intersperse skiing with work, is now possible in a way that was previously unimaginable.

Not all ski resorts are created equal when it comes to their suitability for teleworking, however. We’ve ranked resorts based on the key criteria of broadband speeds, amenities, proximity to airports and openness to non-resident buyers, says Kate Everett-Allen, Head of International Residential Research and the Ski Property Report’s author. Chamonix and Megève lead the way, with Courchevel also making the top ten.

Above all, though, the pandemic seems to have prompted a fundamental rethink of many people’s priorities in life. There is a renewed focus on spending quality time with loved ones in special places. Ski resorts are great for families, says Kate Everett-Allen.

Parents especially are delighted to be in a setting where their kids aren’t constantly glued to phones or consoles. It’s somewhere everyone can be together, regardless of skiing ability, agrees Roddy Aris. Everyone can venture out on the mountains together and then come back for fondue and wine. You can create memories that you can’t create anywhere else. It’s a cross-generation leveler: a shared experience you can’t replicate in any other setting.

If you would like to discuss any of the issues raised in this article in more detail, please contact your Private Banker directly.