Knight Frank Ski Property Report 2021 Commentary

Nov 27, 2020

The Knight Frank Ski Property Report 2021 was published two weeks ago. Billed as “the definitive guide to property market conditions in the world’s top ski destinations”, it is a report worth reading. I’ve linked to a copy of the original ski property report at the bottom of this post.

The Knight Frank team, as well as a few invited specialists, take an annual look at property trends in ski resorts around the world. Inevitably there is a focus on Switzerland, France and North America; these are the destinations that attract the majority of buyers. Notwithstanding current challenges, there is no shortage of demand for prime properties in the most popular destinations. As I have mentioned in previous blogs this summer saw a lot of activity in the Alps.

I would like to add my own observations to a few of the trends reported by Knight Frank. Some of the resorts highlighted are well known to both me and my clients. A few were included in my trip to the Alps at the tail end of the summer.

2021 Ski Property Trends

The Ski Property Report 2021 shone a light on Verbier, St Martin de Belleville and the wider Three Valleys as particular areas of interest. St Martin de Belleville tops Knight Frank’s chart of price increases with a 3.4% annual change to Q2 2020. Verbier wasn’t far behind with a 2.9% increase. Courchevel 1850, 1650 and 1550 were hot on the heels of Verbier with increases of between 2.8% and 2.6%. Their chart of prices per square metre is headed by Gstaad at €32,900, with Courchevel 1850 in second place at €26,700 and Verbier in third at €21,900. St Martin de Belleville, by comparison, has a price of €12,900 per square metre.

Verbier Property Report

Verbier is a resort where I have facilitated a number of transactions over the years and I still go back regularly. I’ve known the resort since the late 80s and the property scene has evolved enormously. Strange as it may seem now, for a long time Verbier property prices didn’t really do much, from the 80s through to the late 1990s prices increased at a very low rate, if at all.

As is the case in most ski resorts, there are three markets to consider in Verbier. First off is the market for staff accommodation, this is often overlooked but is a key part of the property mix in all resorts. Bar staff, restaurant staff, seasonal lift operators and chalet staff all need to live somewhere. In the layer above this, there is what I would classify as “conventional” accommodation. These are the two or three bed apartments and chalets that are home to residents, used as second homes and/or rented out. At the top of the market you get to the large luxury properties.

It was the large luxury properties that took off first in Verbier. This was driven to some extent by tax advantages that Verbier held over other areas. Alongside this driver, prime buyers started to connect to Verbier as somewhere civilized, safe and fun. The resort has a lot going for it, it’s attractive and south facing, has great skiing and is super accessible for Geneva. As an added advantage you can ski to Italy for lunch! When the higher end properties began to take off in Verbier the rest of the market followed.

Why Verbier?

One of my experiences from a few years ago is a good example of why people in the prime market have often chosen Verbier. I was doing a search for a client and at first all they really wanted was a chalet in an attractive resort. As the search progressed, and the buyer was helped to understand the finances in a little more detail, it became clear that becoming a Swiss tax resident would accrue a number of other financial advantages. As an added benefit Verbier itself really appealed to their teenage children. Another buyer of mine was looking at Verbier from the outset and was almost exclusively motivated by tax advantages .

If you are a wealthy buyer then Verbier makes a lot of sense. Switzerland as a destination country is attractive from a tax point of view, as already mentioned, and the Swiss franc has long been considered a safe haven currency. Looking to Verbier specifically, there’s an interesting mixture of people in the resort for those wanting to socialise or network, I find it a fabulous hub for people with international interests. Added to this, for anyone with school-age children there’s a great International School. I know of a couple of families who find it entirely practical to split the school year between Verbier and elsewhere in the world, at no detriment to their children’s education.

St Martin de Belleville Property Report

It was very interesting to see St Martin de Belleville mentioned a number of times in the Knight Frank Ski Property Report 2021. On a personal level it’s always been appealing as a resort. it’s an attractive Village with some interesting architecture and the feel of being a real place. I’ve long considered it a great option for buyers with one eye on lifestyle and atmosphere.

In the past 10 to 15 years St Martin de Belleville has really evolved in terms of quality and client base. One of the pivotal magnets for the resort has been three Michelin star Restaurant La Bouitte. Importantly, the resort also has some nice accessible skiing, including some approachable off-piste and it easily links into the Courchevel and Meribel ski areas.

Historically St Martin has had a very limited stock of properties, but I got involved in a renovation project a few years ago and it was clear that the client base was starting to shift. A combination of a few new build properties, high-quality refurbishments and the innate characteristics highlighted above, meant that buyers who had traditionally looked at resorts such as Val D’Isere or Meribel were beginning to consider St Martin de Belleville. They were understanding that they could access a world-class ski area, enjoy an attractive village and pay significantly less per square metre.

Why St Martin de Belleville?

One of the real advantages for St Martin de Belleville is the “down the valley” environment that greatly appeals if buyers are looking to stay in a resort for an extended period of time rather than just for a week or two of holiday. Whilst lower resorts may sometimes struggle for snow, if you are somewhere for a month or longer this is less of a consideration, especially when you can easily access high altitude skiing. The other advantages you get are an earlier spring and less exposure to the more extreme winter weather. St Martin is also developing much improved infrastructure, with better lifts already in place and improved leisure facilities on the way. The town hall seems supportive of the property rental industry and continues to invest.

Wider Three Valleys

Other Three Valleys resorts have also benefited from a ripple effect off the back of the well publicised success of Courchevel 1850. I would agree with the Knight Frank report that Le Praz in particular is one to watch. Activity in Courchevel 1550 was not highlighted in the Knight Frank Ski Property Report 2021, but is something I have some personal experience of.

A connection of mine has recently sold a high-end chalet in Courchevel 1550; it is interesting to note that whilst he had had a great deal of international interest, it was a French buyer who ultimately sealed a deal. This transaction ties in with the concept of the flight from the cities I have highlighted in previous blog posts. It also shows the important role domestic buyers have during this period when travel restrictions remain in place.

Turning briefly to Meribel, it will be interesting to see how the property market here evolves as it becomes less of a hotspot for British tour operators. I believe there could be some interesting chalets coming to the market over the next 18 months. Whilst effectively a purpose built resort, Meribel has some traditional architecture, great lift infrastructure and gets plenty of sun. There’s also been an exciting period of renovation with a number of hotels being transformed into stunning residences and some dated stand-alone chalets seeing significant investment. This trend is, of course, also being seen in other resorts.

You can read the Knight Frank Ski Property Report 2021 on this link.

If you would like to discuss any of the points raised by the Knight Frank ski property report 2021, or the comments in this blog, do get in touch. We are hopefully on the cusp of a reduction in travel restrictions. Combined with the upturn in interest that always happens when snow starts to fall, this should lead to an interesting period for Alpine property.