Domestic demand likely to increase, with a distinct shift in what buyers are seeking
This has been a particularly turbulent year for the French Alps, with resorts losing the end of the 2019/20 ski season and now having the 2020/21 season disrupted too. Remarkably, the property market has remained consistently resilient, particularly at the top end, where HNWI’s are more able to withstand any economic fallout. In fact, French owners in general are less leveraged than in the past and prices have risen, as the stock of good property on the market remains tight. The Notaires de France report that the average price of an apartment in Haute Savoie has increased by 3.3% in the last 12 months, while neighbouring Savoie has seen an even bigger price jump of 5.5%. Remarkably, Heather Byrne, who heads the Leggett team in the Alps, can reflect on a record year in terms of sales.
“Our team has sold more properties in 2020 than ever before, with very little disruption to the buying process. Despite the two lockdowns we are approaching 150 transactions for the year in the Alps, making use of virtual viewings, electronic signatures and excellent relationships with local Notaires. Sales have been approximately 50/50 between domestic and international buyers”
A prediction for next year
On 14th September, The Banque de France estimated that French GDP will grow by 7.4% in 2021, with a further 3% in 2022 when it will surpass post Covid levels. This is a remarkable statement of faith in the underlying French economy and will provide a solid base for further growth in the national property market. The Alps are at the forefront of this market, with traditionally strong demand from both home and abroad. The domestic market is particularly important and we believe that flexible working patterns and the national push for télétravail (working from home) will mean that residents look to spend longer periods in their second homes – perhaps staying for a month or two at a time. This means an increase in transaction numbers as well as larger budgets, as buyers look for more space and bigger properties
What are buyers looking for post Covid?
In addition to the airier, brighter, homes mentioned above, excellent broadband and space for a home office are both essential. Heather Byrne has been tracking client requirements carefully.
“One of the biggest attractions of the Alps is the mixture of nationalities in the resorts and this year we have been selling properties to buyers from dozens of different countries. Interestingly, it is this cosmopolitan nature that attracts domestic buyers too. Clients have said that if they are going to work from home then they would like to have scenic views and be able to mingle with a range of nationalities, in the shops, bars and restaurants. They are seeking something different from their main residence, which is usually in a city. A recent survey by BNP Paribas said that 81% of French buyers now attach more importance to outdoor spaces such as gardens, balconies and terraces. Local architects, builders and developers have been quick to adapt their plans to cater for this – we are an entrepreneurial bunch in the Alps”.
In conclusion, we see strong growth in the Alpine market throughout next year and beyond. Buyers will be looking for a safe environment, both in a social and economic sense. With an increasing option of year round rentals, we anticipate that demand for property could well become as strong in the summer months as it is in winter. A reduction in availability of new-build stock will keep supply limited. Public investment in resorts remains high, as evidenced by the 40 year, 477M€ investment plan recently confirmed by the Compagnie du Mont Blanc.