IN FOCUS6-8 min read

Peak property: Alpine property is defying macro forces

As a discretionary asset, the Alpine ski chalet market used to be cyclical. In recent years, it has defied market pressures as prices continue to climb. We looked at why this is, what buyers should consider and how resorts are addressing issues around climate change.

Cazenove Capital dialogue magazine January 2024


Victoria Beckett
Editor and Copywriter

The Alpine property market has been behaving strangely in recent months. Despite being firmly on the list of “non-essential” purchases, ski home prices haven’t bowed to the pressure of the cost-of living crisis, geopolitical struggles or market turbulence. In fact, they have only got more expensive.

Globally, prime property values have taken a hit as interest rates have risen. Knight Frank’s Prime GlobalCities Index (PGCI), tracking prices in 46 leading prime markets, fell by 0.4% in the 12 months up to March 2023. That’s the first annual contraction since the Global Financial Crisis. But, in the French mountains, Knight Frank data suggests that prices are up roughly 4-4.5% year-on-year. Why is this?

The appeal of having a second home in this region is undeniable, whether it’s the thrill of skiing, the stunning mountain views, or the promise of a peaceful retreat. However, the returns are not phenomenal. “If you want a pure investment, you’re probably better off in Berlin, Lisbon or London,” says Alex Koch de Gooreynd, a partner at Knight Frank, responsible for the Swiss, Austrian and Portuguese international residential sales.

“As discretionary assets, these properties tend to do well in an uptick economic cycle and are often the first to see price falls in a downturn,” says Jeremy Rollason, a director at Savills, overseeing Austria, France and Switzerland ski properties.

For the first time in probably two decades, this isn’t true. “It’s become non-cyclical. Yes, we might have seen a drop in transactional volumes at the lower end, but we’re not seeing a drop in prices.”

Finite stock

One reason for climbing prices is the supply-demand imbalance. The increasing difficulty in obtaining planning consent for development projects means that Alpine property prices are likely to remain resilient. Licensing restrictions make it difficult to buy second homes in Austria unless they are rented out.

All of these factors have contributed to Rightmove listings across the Alps being down by 56% compared to prepandemic levels. “The pool from which people are fishing has shrunk to a tiny little puddle. That is putting immense strain on pricing,” says Roddy Aris, a partner at Knight Frank, focusing on international residential property in the French Alps and Paris.

In Switzerland, buyers are restricted to 2002m per individual – although people have found creative ways to work around this. Each property needs its own front door and kitchen and must be separated from other homes. However, a larger property with two front doors, kitchens and a hallway down the middle could be bought by two siblings and then shared as a larger home.

Impact of rising interest rates

The cost of debt has approximately doubled in Europe over the last year. This has impacted the property market, but only up to a certain price point. As many as 70% of Knight Frank’s Alpine transactions above (£1.28 million) were to cash buyers. Properties below around €2-3 million tend to be more sensitive to mortgages and interest rates. A two-tier market has therefore developed in the Alps that has led to less transactional volume at the lower end, Jeremy explains. “However, the top end of the market has remained insulated because, bluntly, buyers are less reliant on debt,” he says.

Some owners at the lower end of the market are starting to be slightly more stressed. Not only have interest rates gone up for those not on a fixed-term mortgage, but they are typically paying in sterling which has a less advantageous exchange rate. This is especially true against the Swiss franc.

WFA (work from the Alps)

With a challenging economic backdrop, owners increasingly want their ski home to cover its costs. “You need to be unbelievably wealthy to buy a place in the mountains and not rent it out,” says Alex. “I would say 95% of my clients rent, because you can’t have an asset like that not sweating. In the past, his clients might have been happy if they rented their property maybe 10 weeks of the year. Nowadays, that figure is closer to 30 weeks.

French properties often see higher rental yields than Swiss properties, so the owners are more likely to rent them out, according to Alex. This is because French properties cost less to buy and maintain, and, with the euro being cheaper than the Swiss franc, French holidays attract more holiday-makers. However, as Swiss interest rates have risen, owners have become more open to renting.

Figure 1: Shrinking stock levels are supporting prices

No. of listings

Shrinking stock levels are supporting prices

Source: Rightmove overseas

There is also growing demand for rentals across the Alps. Since the pandemic, executives are increasingly able to work remotely. A growing number want to base themselves in ski resorts throughout the winter season. This has pushed up rental yields and reduced the supply of rental properties.

“The Swiss have woken up to this and are very much encouraging people to come and live in resorts,” says Alex. Resorts like Crans-Montana are taking advantage of that. In Verbier, for example, kids can join the Verbier International School for the winter term only. Parents can then move them back to their international school wherever they live. Things like this encourage people to live there for longer.

Is climate change making buyers venture higher?

Some expected climate change to push buyers into a shrinking space, but so far the impact has been muted. High altitude is usually a consideration of buyers, of course. “But, some of the best resorts are already high,” says Jeremy. This includes Chamonix/Argentiere, in the shadow of Mont Blanc, Courchevel (resort altitude of 1,850m), St Moritz (resort altitude of 1,800m) and Verbier (with access to Mont Fort at 3,300m). Val d’Isère (resort altitude of 1,800m) benefits from the vast area of Espace Killy which includes Tignes and La Grande Motte glacier at a towering 3,600m. Andermatt’s not as high but is in a geographical position that benefits from very favourable weather systems. Cervinia, on the Italian side of the Matterhorn, as from this summer has never been better connected into Zermatt’s fabulous ski area.

Ski resorts are increasingly selling themselves on dual seasonality too. “If you looked at the graph of property values versus altitude, there isn’t always a direct correlation. Sometimes it’s even inverse,” says Jeremy. Gstaad in Switzerland, for example, is in Savills’ top ten resorts in terms of prices, but it is comparatively low altitude compared to places like St Moritz and Verbier. This is partly because the lower resorts have compensated over the last decade or so by investing in snow cannons and enjoy active summer seasons.

The difference that the expansion of summer activities has made on ski resorts is “immeasurable”, says Roddy. In Chamonix, for example, the town population is roughly 10,000. In summer that increases to roughly 130,000. “There are now more people who go to Chamonix in the summer than in winter. Therein lies the appeal of owning a home that is in what we call a year-round or dual-season resort,” he adds.

What should buyers consider?

When it comes to choosing the right resort, several options stand out. For those who are primarily interested in skiing, Val d’Isère is a top choice thanks to its phenomenal ski domain and excellent snow conditions. For year-round usage in France, Chamonix and Megève are ideal choices due to the wide range of services and amenities they offer. When it comes to Swiss resorts, Alex recommends Verbier for pure skiing and Crans-Montana as a true year-round resort.

Jeremy advises prospective buyers to keep an open mind. Due to constricted supply, it is often difficult to find everything on a buyer’s wish list. He also noted that his clients tend to underestimate the time that renovation work takes in second-hand properties.

Switzerland has implemented restrictions on new second homes since 2016. Austria is not open to Brits and most second homes have a requirement to be rented when the owner is away. “If you wanted a pure second home, you can either buy a resale in Switzerland or a new build in France,” says Jeremy.

This means there are only so many properties that you can buy in Austria, France and Switzerland. It’s also becoming harder and harder to get planning consent for chalets or development projects. Even before the pandemic, prices in many ski resorts had long since detached from the mainstream housing markets in their respective countries. “Due to the supply and demand imbalance alone, unless there is a worldwide recession, we don’t see regional geopolitical events affecting the values of these properties,” says Jeremy.

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.


Victoria Beckett
Editor and Copywriter

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.