Stumbling out of the MooserWirt after dark, I’m exhausted, happy and well fed and watered. At the après-ski in Sankt Anton here in the upper reaches of the Tyrol, I’ve met and mingled and danced with crazy characters from all over the world over the past few hours. Each skier has their own compelling war storyto share, and eventually, I leave with new friends and followers and even some business cards. I could get used to this, I think.
Many other tourists feel the same way, prompted by the euro’s sharp drop since the beginning of this year, and are ringing brokers to discuss more permanent investment options in the Alps. "Properties in Austria are 15 per cent cheaper than last year with the weak euro versus the US dollar and the British pound," says Paul Kleinekorte, Owner and Director of Pure International, an estate agent with specialising in investment-grade properties in ski resorts and on beachfront locations in Europe and North America.
Pure International has had interest from both Arab nationals as well as expats living in the UAE, and enquiries have also come from Qatari buyers.
"We see that Middle Eastern investors like the combination of skiing in the winter and the mild climate in the summer," Kleinekorte says. "On top of this Alpine property is a safe investment that generates income via rental returns."
Returns can often be better than from more established assets. Real estate broker Knight Frank says investment yields from an off-plan ski chalet in a resort such as Courchevel average 6.7 per cent a year, comparing favourably with prime Central London, at 2.8 per cent. Its calculations are based on a 14-week occupancy for the chalet and year-round tenancy for the London property.
"Buyers are no longer waiting to see the development coming out of the ground. There is a willingness to purchase off-plan — not evident a few years earlier," real estate advisory Savills says in its 2014-15 Alpine Property Market report. "Sales enquiries are now less seasonal than they were. [They] are [also] recognising the year-round appeal of the Alps." According to Savills, the Alpine ski resort market is highly diverse, with wide variations in prices and supply. While Swiss resorts are the most expensive and difficult to buy into, with prices in Verbier and Andermatt 80 per cent higher than average, Austria is more affordable for buyers, and French resorts straddle the two.
Sankt Anton and the nearby villages of Lech and Zürs, all in western Austria’s Arlberg area, are repeatedly ranked among the top ski resorts in the world. They are magnets for the jet set and royals. the, and royals from the Netherlands and the UK to Jordan visit regularly. are regular visitors. Jordan’s King Abdullah of Jordan is a fan, the Dutch royals return each year to the Gasthof Post hotel, and Lady Diana skied here with her sons. In the summer, the Alps provide a wonderful escape from the oppressive heat of the GCC, with plenty of family activities such as hiking and mountain biking.
Yet, prices here, less than two hours away by car from Zurich and three hours from Munich, are up to €20,000 (about Dh78,269) less than at the better-marketed Swiss Gstaad and St Moritz resorts.
The euro has shaved a further Dh200,000 off the lowest price, bringing an entry-level apartment of €195,000 close to three-quarters of a million dirhams. That price fetches gets you a one-bedroom apartment in the picture-postcard village of Wald am Arlberg, a new development 15 minutes away from Lech and Sankt Anton. Chalets here are relatively affordable at €475,000, making for a relatively affordable way to own a second home in the Alps, and close The Arlberg Chalets, close to the slopes and golf courses. They are a rare exception to the ghost resorts rule that all new developments must be rented out for specified periods so when not in use so that the villages aren’t deserted during the low tourist season. Pure can arrange mortgages with local banks.
At the other end of the market are super chalets more befitting those accustomed to the UAE’s lifestyle. Chalech is a set of four three-storey chalets set just off the pistes in Lech. From three to five bedrooms in size, each has a private pool and wellness area, and the interiors can be finished to the owner’s standards. The facility will be serviced by the staff of Oleg Deripaska’s ultra-luxe Hotel Aurelio, with shared amenities including a lounge, restaurant, reception area and spa (where you can try molecular cosmetologist Dr Barbara Sturm’s vampire facial).
Chalet prices range from €6.2 million to €7.4 million, and developer Reinhard Wolf says the hotel will let them as needed, and share the proceeds with the owners. Double rooms at the 18-unit hotel go for €850 in the pre-season period and €2,100 during the high season.
"Nowadays, the rich are richer and they expect the same level of comfort in the mountains as they have at home," says Roddy Aris of Knight Frank in London. And the super-chalet, once restricted to Courchevel and Megève, but is fast spreading to other parts of the Alps as these resorts adapt to new the demandsof the modern buyer.
Features such as TVs in every room, en-suite bathrooms in every bedroom, a pool and spa area, staff quarters and covered parking are all de rigueur now. "This market is largely stagnant with very little activity, the result being that it is now a buyers’ market," Aris says. "There are opportunities to pick up large, prestigious chalets for a fraction of what they were worth three years ago."
Among the factors pushing Alpine property to new peaks is limited availability of land to build, which puts an means there’s increasing strain on existing stock. Also worth considering are developments at a local level, says Aris, like which mayjors are investing and where they’re doing so.
So what do investors need to guard against? "Drinking too much glühwein," Kleinekorte quipswhen asked to enumerate risks that property investors must guard against, referring to the popular winter beverage. More seriously, he advises against buying before understanding usage restrictionsin different regions. "France and Austria are much more regulated when it comes to buying ski property, and These countries have had a strong focus on tourism for many years and therefore buy-to-let projects are much more common than in Switzerland," he says.
"People looking to buy in these countries will, in 95 per cent of cases, have to rent out their property." Kleinekorte adds that Switzerland is now also following suit with restrictions such as the recent Lex Weber cap on second homes.
Currency fluctuations, particularly with the Swiss franc, in Switzerland, where the Franc is now at its strongest level in recent times, can also pose a major problem, and Kleinekorte says buying at low altitudes can work against investors since such properties come with the risk of poor snow conditions, which will cause tourists to go elsewhere for their après-ski.
Central to a property investment in any resort is the question of tourists. Seasonal demand determines rental yield and continued infrastructure investment shapes long-term attractiveness. "Popularity is often determined by the size of the ski region, snow records, diversity of facilities, etc," says Kleinekorte. "The Arlberg region is rated highly on all [these] aspects. We always advise buyers to invest in popular tourism regions."
