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Look up to the slopes
31 January 2010 By Diarmaid Condon
There was a time when skiing as a pastime was considered something only for the very well to do, with the result that ski property was out of reach for all but the most wealthy.
But with the property boom of the 1990s came a sense of empowerment which changed all that.
The general feeling at that time was that anyone could own a property anywhere in the world if they really put their mind to it, and ski property was no different.
The advent of French leasebacks offering long term rental contracts did nothing to dispel this notion, making ski property an aspirational purchase even for those with modest savings.
The emergence of Slovakia, Romania and Bulgaria on the property radar appeared to bring the entry level pr ice for ski resort property within the reach of even the most modest of these (or borrowers and remortgagers, as they would more normally have been).
Bulgarian ski properties were regularly promoted for well under €50,000, though in reality very few people ever bought anything for less than €100,000 when it became obvious that what they could get for half that price was normally not all that acceptable, even when viewed through the rose-tinted glasses of plans and glossy brochures.
Of course with the boom came the raising of prices by developers, which gave previous purchasers the comfort of feeling that their investments had risen in value.
Unfortunately, actually realising that value was often close to impossible due to the glut of new properties which each completed unit was competing against.
With the virtual implosion in property prices across a variety of countries there is an obvious question for those with an interest in ski related real estate - is now a good time to pick up a cheap ski property?
The answer is that while there is plenty of cheap property around at the moment, the consensus is that most of it is cheap for a reason. However that’s not to say that in certain markets, some developments aren’t worth a look.
Bulgaria
Bulgaria has often been held up as a cautionary tale from the property boom and bust of the past decade.
Late to the property festival that engulfed Europe, it had really only begun to get going when the downturn hit in earnest.
Hard luck stories abound of Irish buyers with incomplete or virtually worthless units in the country, but Bulgaria is not a totally closed shop, even now.
The Russians are still buying, but they are exceptionally choosy about what they will consider, only purchasing the best product which has already been completed.
Dylan Cullen of Appreciating Assets, which purchases prime Bulgarian beach and ski units and sells it on to investors, said that Russia is now the main focus for his firm and he hopes to conduct the first auction of Bulgarian property in Moscow in the spring.
While Russian buyers won’t buy off-plan, they will pay for high end properties in a good location and with first class facilities - unfortunately, not many Irish owners have such properties to sell.
Tom Fingleton of Buy in Bulgaria said of Bansko, a favourite resort with Irish buyers during the boom: ‘‘Prices in high end developments are still above €1,000 per square metre, with some as high as €1,500 per square metre. The real price erosion has come in small developments without facilities.
Prices in those schemes were €1,200 per square metre, but have dropped to €600. Only really good properties in exceptional locations are holding their value."
According to Dylan Cullen, Bulgarian ski properties are now back to 2005/2006 price levels. ‘‘People selling have to base their figures on what they paid for their properties, not what they were told they might have been worth during the boom," he said.
Appreciating Assets currently has six units for sale in the Pamporovo Palace development, beside the ski lift in the resort of Pamporovo. Units here sold from €45,000 in 2007 and are selling for the same price today, because of the location, with local finance available.
Cullen said quality developments in Bansko such as Sunrise Apartments, Aspen Golf, Whitewood Lodge and Paradise by the Walnut Trees are holding their value, but less well-located units are suffering.
USA
The USA has famously had one of the largest property crashes in history, so investors should be able to pick up some ski property for a song there, right? Probably not, actually, but prices have come back significantly, albeit from a very high price point to begin with.
Crested Butte in Colorado is considered to have some of the best scenery, skiing, hiking and mountain biking in the US. The least expensive property to sell in the region in 2009 was a 66 square metre, two-bed, two bath condo for $70,000, while the most expensive was a 282 square metre, four-bed, four bath slopeside penthouse condo at The Lodge at Mountaineer Square for $1.3 million. The average condo price for 2009 was just under $340,000.
‘‘US ski resorts have all seen changes in their real estate markets in the last two years," said Trish Giassa of Benson Sotheby’s International Realty.
‘‘Across the board, the real estate sales among firms in the Rocky Mountain Resort Alliance are down approximately 60 per cent from the height of the market. There are now signs that sellers are lowering prices to match buyers’ expectations."
Currently on the market is a three-bed, two-bath condo within walking distance of the ski lift at an asking price of $375,000, around €265,000 at current exchange rates. It includes an oversized garage and has panoramic views.
Canada
Unlike the US, Canada’s property market is already well on the road to recovery. Prices began to increase last May for the first time in a year, and at this stage there are even suggestions that the government may push for larger down-payments and shorter mortgage repayment terms to avoid the possibility of the market overheating.
The country posted record breaking sales for December, and seasonally-adjusted sales have risen for 11 straight months now. It is also a country about which you’re likely to hear more over the coming weeks as its most famous ski resort, Whistler, will host the Olympic and Paralympic Winter Games from February 12 to 28.
Whistler isn’t the most popular resort with Irish skiers because it is located in the Rockies, along Canada’s western seaboard. It is generally agreed, however, that it offers some of the best skiing on the American continent.
Whistler Resort and the famous Blackcomb Glacier are a 1.5 hour drive north of Vancouver, and the resort has all the amenities of a small city. Property prices in the region have been stagnant, rather than falling, over the last few years.
Whistler Real Estate has a listing for a recently completed chalet within walking distance of Whistler village, priced at CAD$3.367 million (around €2.25 million), as well as a one-bed condo, close to the resort’s shops, restaurants and ski lifts costing CAD$499,000 (around €333,350).
France
There is no way to mention the French ski property market without addressing how much heartache Irish leaseback investors have experienced over the past two years.
Many ski leaseback management companies have been bankrupted following a number of poor ski seasons, and this has led to consolidation of operators and a great deal of unhappiness with the miserly deals being offered to property owners by incoming replacement operators.
There are also owners not receiving rents on time - or at all in many cases. It has certainly left a very bitter aftertaste with Irish purchasers in France, and has seriously shaken the assertion that leaseback is a ‘safe and secure’ property investment product.
Despite that, France is still seen as an attractive location in which to purchase property, although the number of buyers from Ireland has obviously dwindled greatly since the boom years.
According to Ciarán Mannion of Overseas Properties, French prices dropped nationally by an average of 4.9 per cent during the final quarter of 2009.The Rhoˆne Alpes region currently shows average prices per square metre €2,350, but the ski resorts of Mege've, Samoe ¨ns and Chamonix would far exceed this average, with the most upmarket areas still averaging around €8,500 per square metre.
Prices in the Savoie have fallen by 10 per cent in the past two years, while the Grenoble region has seen a fall of 9.2 per cent over the same period. Quality properties in good locations have, however, merely stagnated in price.
A development of newly renovated luxury apartments in Mege've, the gateway to Mont Blanc, is currently available at prices from €850,000 for a 64 square metre two-bed. A golf project in Pra Loup is closer to Marseille, and has units selling from €158,000 for a one-bed.
Switzerland
Switzerland is unique in that virtually all foreign property interest is directed at ski property, and because the country is famously restrictive in allowing non-residents purchase property there.
Even with some recent easing of the restrictions, non-residents may only purchase one property to a maximum size of 200 square metres of liveable space per family. Individual Swiss districts, known as cantons, also have restrictive quotas for foreigners. There are also restrictions on sale, usually meaning you have to hold the property for at least five years.
While such regulations have proven frustrating for foreign buyers, they have protected the Swiss market from a speculative bubble. Hence, real estate prices have remained fairly stable as demand for the property available to foreign purchasers in prime and popular locations has not dwindled.
While sales levels had slowed, Hannah Coppersmith of Pure International says that since September there has been a significant increase in demand. As elsewhere, interest in off-plan properties has reduced dramatically, with clients looking for projects that are completed to reduce their risk.
Prices are, according to Coppersmith, largely the same as they were two years ago due to restrictions and a lack of oversupply.
The company is currently offering a selection of luxury apartments in the centre of Flims in Graubunden. The project is located five minutes from the ski lift, and has access to the five star facilities of the Park Hotel Waldhaus, including an award-winning spa, a fully glazed indoor pool, outdoor massage pool and steam baths.
The Flims ski area has access to over 200 kilometres of pistes in one of the most snowsure resorts in Switzerland. Prices start from just under €475,000 at current exchange rates.
CONTACTS
Appreciating Assets: 016328632, www.appreciatingassets.ie
Buy In Bulgaria: 01-2544155, www.buyinbulgaria.com Benson Sotheby’s International Realty: 001970-5968480, www.Homes-In-Crested-Butte.com
Rocky Mountain Resort Alliance: www.rmra.com Whistler Real Estate: 0016049052873, www.whistlerbuyer.com
Overseas Properties: 0879032576,www.rtfrance.com Pure International: 00442030312863,www.pureintl.com
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