Tag Archives: covid

How is COVID affecting property prices in the Alps?

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Contrary to the received wisdom in the media we are not seeing a drop in demand or a reduction in prices for property in the Alps.

The popular press is predicting a drop in prices. We won’t list the articles on this subject. They certainly play well to our assumptions. And if you are in the market for a property, it plays well to your hopes! However, it is not our experience on the ground.

If you don’t have time to read on, then I will summarise our findings here. These are based on our historical record that goes back 20 years. We have increased activity on our website, and so far this month we have almost record numbers of enquiries. I say “almost” because as I write this, the month is not finished. But on the performance so far, enquiries for May 2020 could break our record. And since the beginning of our confinement, we have agreed 16 sales. Our prediction during this confinement would have been zero sales! The ratio of agreed prices to asking prices is minus 3.7%. Based on previous experience that is completely normal. Unless the property is new to the market and there seems to be other interest people will often make a lower offer than the asking price.

I’ll breakdown our 16 agreed sales here.

  • Average property price 422,750€
  • Agreed offer on average 3.7% lower than asking price.
  • Ranging from 62.000€ to 1.595m€
  • 8 Anglophone buyers (based in the UK or elsewhere)
  • 7 Francophone (mostly based in France)
  • 1 Finn

There are 2 distinguishing features of these buyers

  • 80% of them are new to us this year. Normally that would be about 50%, many of our customers spend some time looking for a property.
  • Most of them don’t need a mortgage, and therefore don’t need rental to help pay for the purchase. In fact, less than half of them see a rental return as important.

At the moment we are experiencing two types of buyers

  • Buyers in the middle of a purchase. Something they might have started last year, a long term project, they have signed the first contract and would normally be finalising the purchase at this point. COVID has destabilised these sales. The world they knew before they made the decision to buy has changed, and they are not sure about the future. Many of them are having second thoughts. Sometimes forced upon them by financial worries. Inevitably some of our sales agreed before COVID will falter and the properties will return to the market.
  • New buyers, buyers who have had the dream of an Alpine home for a while and have made the decision to take the plunge during this crisis. These sales may well be more secure. As far as these purchasers go, the world situation can only improve (and seems to be doing so).

So what is the main motivation of these new buyers? Some have suggested that they are looking for a lock-down bolthole. We don’t think that is the case. Travelling during the lockdown to a second home has been outlawed. Most (but not all!) have remained at their principal residence. We get the feeling that these “new” customers are reevaluating their lives and priorities. They are taking the opportunity to follow a dream. When you think of your own situation you might be able to emphasise with a reset of what your own aims and objectives are!

If you are interested you can see the list of properties we have recently sold on our “SOLD” property page. This is somewhat old news though. Contact us if you would like a more detailed breakdown of our sales.

Coronavirus COVID-19 and your Property in the Alps

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Are people still looking to buy?

For the first few weeks of the COVID crisis, demand for property in the Alps really did stop dead. One month into the confinement, and that is not the case now. Enquiries are down, but only by about 30%; activity on our website did drop by 40% for a couple of weeks, but now it is up on the same period as last year.

Pageviews on the Alpine Property website, March/April 2020 compared to 2019.

Do we expect a drop in prices?

We went through something similar in 2008, similar but smaller. Many people will wait to see if prices drop. If you are looking for a bargain then you need to act now. During the hiatus. And people are doing just that – we have agreed 4 sales over the last week. And two of them were at the full asking price. We can feel there is plenty of demand. If you wait until everything is stable again then you might have to wait for a while.

Do we expect a rise in prices?

It is possible (but arguable) that prices will rise in the medium to long term. The various governments may print money to try to deal with COVID and the recession that follows. In the past, this has led to inflation and property prices go up when this happens. If there is an imbalance between how countries react then you will see changes in the exchange rate. If the UK prints more money than the EU then the value of sterling could fall. All this also has to be weighed against the performance of the economy.

What is Alpine-Property doing during the Pandemic?

Up until 11th May, we are in “confinement”. This means that we are all encouraged to work from home, save for essential activities that cannot be done remotely. So, for Alpine-Property, there is no change. We don’t have bricks and mortar branches. All our agents are available as usual and working from their homes. We are on hand to answer your questions and discuss your plans.

How can you view a property?

On the whole, we can’t meet anyone in person at a property. And, even if we could, it is very unlikely that anyone could travel into the area legally for this purpose. However, we do have virtual tours for the majority of our properties. And assuming a property is empty we can make a virtual tour if one is missing. Obviously you can view these tours on our website in your own time. However, we encourage appointments with our agents so that they can accompany you on a virtual walkthrough, explaining about the property as they go. Our agents are doing this every day. You can see the properties we have for sale here.

Can you start the buying process?

You can, and some people have. Most of our customers are using this time to do their research, find out what is available. Decide which ski village suits their requirements. If you would like to borrow against this purchase, speak to the mortgage companies and find out what they can offer. Discuss the areas with our agents. We have 16 agents spread across the Haute Savoie. Each one would love to talk you through why their area is the best!

Will COVID prevent a current sale from completing?

Unlikely. Though it might delay it. During the first few weeks, we had to deal with various jams at the notaires’, the banks, and with more mundane issues like arranging energy reports! All these jams are beginning to become free now. All deadlines have been extended too. Contracts aren’t going to immediately fall apart because a deadline has been breached. So this means that a sale is more likely to be delayed than stopped.