No one knows what the legacy of Sochi, Russia's $51bn (£31bn) Olympic resort, will be but in the French Alps, home of the inaugural Winter Olympics 90 years ago, tourists and foreign property investors – including Russians – are back in force and hungry for an investment.
Property agents in and around the resort of Chamonix, birthplace of the Winter Games in 1924 and hub of the Savoie region, are reporting soaring interest from foreigners, as well as a widening range of nationalities. Chamonix's infrastructure, activities and year-round seasonality appeal to both tourists and foreign homeowners, the latter group attracted by the low mortgage rates currently available in France, as well as the weaker euro and the security of an investment in an international market.
"Last summer we had 4,000 visitors to our tourist office in just one day – we haven't seen numbers like that for 10 years," Emanuela Gillberg of the Chamonix Tourist Office said in January. "Asia is a growing market and we're seeing more and more Chinese, Koreans and Indians passing through, especially in the summer, which in Chamonix is as busy as the winter. We used to have a dead season, but increasingly that is disappearing too. Chamonix has more than 9,000 permanent residents."
Things should only get better, as only in November the Chamonix lift management company, Compagnie du Mont Blanc (CMB) and the Chamonix council confirmed a 40-year investment programme worth €477m (£392m), which will see the upgrading of ski lifts and facilities in the Chamonix area.
Demand for property in the French Alps comes predominantly from northern European and British buyers. In the prime end of the market, Russians and citizens of the Commonwealth of Independent States now make up the third largest source of foreign demand, according to a recent report by Knight Frank, which also reported price increases upwards of 8 per cent for prime property in Chamonix and Morzine during 2013.
Price increases last year were even greater in Switzerland, with Zermatt and Davos recording 14.1 per cent and 10 per cent respectively. One landmark Swiss development targeting the international market is the Andermatt resort which, once complete, will include six hotels, 490 apartments, 25 chalets and world-class year-round facilities.
Such bullish activity contrasts with the depressed conditions affecting the majority of the French property market. "We know that 15 per cent of all property sales to overseas buyers [in France] are in the Alps and this accounted for around 1,500 transactions last year," said Trevor Leggett, chairman of French property agency Leggett Immobilier, which has a specialist French Alps branch. "In 2014, we expect this figure to rise back up to the level of previous years and we're likely to see price rises this year, as this increased demand feeds through to the market. The average spend of an international buyer in the Alps is around €390,000 and, of course, this rises substantially in prime areas."
MGM, the region's leading developer of skiing résidences, saw inquiries in January more than double at its London office compared with January 2013. By the end of the year, the company will have broken ground for a new 51-unit complex in Chamonix, the biggest new development in the resort for many years and once complete an integral part of a new district on the southern edge of the town. Called Cristal de Jade and MGM's first five-star résidence, it is due for completion in Christmas 2015.
Fifteen per cent of the one to four-bedroom apartments, ranging in price from €299,666 to €750,000 and available as leaseback only, have already been sold. "The year-round popularity of Chamonix means that there is an urgent need for more new accommodation to suit the requirements of the town's cosmopolitan community, as well as seasonal visitors from around the world," said Richard Deans of MGM's London office.
Similarly, MGM has offloaded more than half of the apartments at its Le Centaure résidence in Flaine, which opened last season and where two-bedroom apartments start from €279,166.
Benefiting both from Chamonix's increasing demand for accommodation and France's low mortgage rates are expat couple Andrew and Lucy Masters, who rent out their three-bedroom apartment through local property management company Mountain Base. The couple, who work in finance and live in Singapore with their two children, purchased their property through MGM two years ago, paying around €630,000 for it and buying with an interest-only mortgage through GE Capital.
The Masters chose to purchase with a classic freehold contract rather than buy into a leaseback scheme, which requires owners to lease their property back to a management company in return for a 1 to 2 per cent yield and fixed personal usage, as they wanted the flexibility to stay as often and whenever they wanted.
"After our own visits, we get about 10 weeks' occupancy during the ski season and eight in the summer, which just about covers the apartment's running costs once we've paid the agency commission," said Andrew. "We spent four weeks there over Christmas and will visit again in the summer – we love Chamonix as it's a true year-round destination. Our mortgage payment has come down in the last year thanks to France's lower rates, which has been a bonus."
If prices continue to rise in Chamonix, rates stay low and sterling maintains an upward trend against the euro, investors like the Masters can look forward to substantial returns from a French ski property, not to mention plenty of fun holidays all year round.