The average price of a ski chalet has increased by 4.4% from June last year to June this year, marking the highest growth since 2014, notes Knight Frank’s The Ski Report 2024, published on Dec 4. This excludes the mini-boom in prices during the pandemic.
The report found that a low supply of luxury chalets drove the price hike amid robust demand. For instance, listings across three key French resorts have decreased by 56% compared to pre-pandemic levels. The survey also found that 60% of survey respondents across 34 countries expect the price of an Alpine property to rise in the next 12 months.
Luxury ski resorts face challenges such as climate change, infrastructure upgrades and stringent planning rules. Some resorts in the French and Swiss Alps are taking steps to address the climate crisis by developing sustainability features. This includes working with scientists to produce snow forecasts for the next three decades, adopting renewable energy such as solar, and using greener fuel for their snow groomers.
The report is optimistic that the market is expanding to attract buyers from Asia, the Middle East and southern Europe. Kate Everett-Allen, the head of global residential research at Knight Frank, says that this is due to rising temperatures globally that make owning second homes in cooler places more favourable. Homeowners of resorts in the French and Swiss Alps can enjoy low purchase and ownership costs, the opportunity to diversify their currency and reap rental income, hedging them against rising inflation.
Knight Frank’s head of sales of international project marketing, Clarice Lau, notes that an Alpine home may not be the top choice for high-yielding assets for investors. However, several factors boost landlords’ revenue, namely the growth of year-round tourism in the Alps, a shrinking pool of homes for rent, and a packed calendar of sporting and lifestyle events.
Lau points out the other factors investors can look forward to should they own a home in the Alps: “The high proportion of cash buyers in the world’s top ski resorts means the higher interest rate environment has had little impact on their appetite for a ski home. This is on top of the transition to hybrid working, the renewed focus on health and wellness and accumulated savings during the pandemic years, and demand remains robust.”
She adds that Niseko remains the top choice for skiing destinations in the Asia Pacific due to its location proximity, world-renowned powdery snow, year-round resort, retail, world-class restaurant amenities, and favourable dollar-to-yen exchange rate.
