General French market overview
Despite a weak economy, escalating unemployment, a decline in purchasing power, and virtually 0% economic growth, the French real estate market is proving relatively resistant despite a drop of 1.9% in market prices throughout the country. In an effort to aid the economy, the European Central Bank has lowered interest rates and banks are lending generously to candidates with solid portfolios.
There is some good news, however; a ski chalet in the French Alps remains one of the most popular investments for international second home buyers. As much as 15% of all French property sales to overseas buyers happen in the French Alps. A very recent study has shown that more properties are being bought in the Alps than in other popular locations such as the South of France due to skyrocketing prices and a limited season there. Buyers are waking up to the fact that the French Alps are ideal in terms of year round holidays. They are also taking advantage of low mortgage rates, a weaker Euro (for example one British pound now buys 1.25€, compared to 1.15 a year ago) and the appeal of an investment in an international market. Much of the demand for property in the French Alps comes essentially from northern European and British buyers. At the prime end of the market, one finds Russians and Commonwealth citizens doing the buying.
Current Market Conditions in Chamonix
Due to its international appeal and its world renowned reputation as the world capital of skiing and mountaineering, the real estate market in Chamonix has continued to be tenacious and has managed to maintain elevated but relatively stable prices. Another contributing factor which helps to keep prices afloat is Chamonix's unique proportion of secondary residences, an astonishing 60%. When one buys in Chamonix, it is to invest and this helps to keep prices steady.
In general the price per square meter (€/m²) in the centre of Chamonix varies between 5000-6000€/m². The price per square meter for an apartment in need of renovation is lower, around 3500-4500€/m². Exceptional apartments which are near to ski lifts, with Mont Blanc views, southern exposure, underground parking, and close to shopping sites (for example: Les Balcons de Savoy) can often reach prices as high as 9000€/10.000(€/m²) Les Bois, Les Tines, Les Nants, Les Moussoux, and Argentière also remain highly sought after. For buyers with lower budgets, one needs to travel away from the centre, down the valley towards Les Bossons and Les Pelerins where prices are between 3500 and 5500€/m². Close to the Swiss border, Vallorcine, with somewhat equivalent prices, is also an attractive alternative. But in this area, one needs to take into account the risk of being somewhat isolated in the event of a large snowfall, leaving one stuck on the wrong side of the sporadically-shut Col des Montets.
At the moment, the lion's share of transactions are around the 250,000€ mark. Much sought after, but extremely rare on the market, are well located 2 bedroom apartments with a price tag of around 550,000€. As soon as these properties arrive on the market, it is relatively easy to find a buyer straight away.
For chalets, depending on location, the most frequent deals are being struck for anything between 6500 and 12000€/m². So the mid to high end of the market is definitely the sector with the most traction at this point.
Chalets and apartments which have been overvalued can stay on the market for a long time – often over a year. This happens more than often in Chamonix, due to an unrealistic initial valuation, changing market demand or just an overly optimistic seller. If you are interested in a buying property which been on the market for a while, PLEASE don't hesitate to negotiate.
Dawn Woods is an American independent real estate specialist based in the Chamonix Valley. You can find more information on her luxury chalet, ski apartment and mountain farmhouse portfolio at www.chamonixmontblancprestige.com or by calling her on +33 6 99 65 64 85.
