 |
|
Mountain High
|
By: Kristy Manning-Wilcox, Issue 38 - Autumn 2009
|
(Australia: Thredbo New South Wales and Mt Hotham Victoria. New Zealand: Queenstown. Japan: Niseko. United States of America: Aspen. Canada: Whistler)
|
AS GLOBAL ECONOMIES PLUMMET, INVESTING IN LUXURY SKI ACCOMMODATION MEANS YOU CAN COMBINE A HEALTHY INVESTMENT RETURN WITH AN ENJOYABLE LIFESTYLE.
|
Thredbo, NSW, and Mt Hotham, Victoria, Australia:
|
Domestic ski resorts are a prime investment opportunity given the unstable Aussie dollar, the ease of access to local resorts and an increasing trend for short breaks. Steve Forbes, director of Forbes Stynes Real Estate, says Thredbo has traditionally been considered Australia’s best resort from an investment perspective. “Both Thredbo and Lake Crackenback are standout lifestyle investments because of their location and the range of year-round activities like fishing, biking and hiking. There are reasonable returns (on average 6% net), combined with the opportunity for owners to use investment properties for their own leisure.”
|
Thredbo’s mantle has been challenged by Victorian developers, who have invested heavily in luxury infrastructure and in developing year-round communities over the last five years. Mt Hotham has Australia’s highest airport, ensuring skiers can fly direct from Sydney and Melbourne in just over an hour. Currently, vendors want to do deals, and returns have improved comparatively to the level of cash rates; 2009 is a buyer’s market.
|
“What we are now seeing is a pickup in sales inquiry after the steep falls in interest rates”, says Forbes. “Demand for Thredbo accommodation over Christmas 2008 was strong due to the fall in the value of the Aussie dollar against all major currencies, and thus less Australians are travelling overseas. Lake Crackenback accommodation bookings over Christmas 2008 were up 20% compared with 2007.” Expect to pay around $600,000-$700,000 for a luxury one bedroom and loft apartment, fully furnished with garage. Real estate agents will manage the property for you as part of the sales contract. With the exception of Dinner Plain in Victoria, most domestic ski properties are long-term leasehold rather than freehold, so read the fine print.
|
Queenstown, New Zealand:
|
Excellent snow, cheap flights across the Tasman, short flying time and spectacular scenery mean that New Zealand’s Queenstown will never go out of style with investors. Queenstown and the surrounding towns of Arrowtown and Wanaka work hard to ensure hiking tracks, cycling trails, and horse trails are kept in good condition. The famous pinot region of Central Otago is nearby. On the economic front, the $NZ is a serious underperformer compared to the $AUD, so entry prices to the luxury market look relatively cheap at $NZ600,000 for a threebedroom, two-bathroom apartment with garage. New Zealand’s high inflation rate may make some buyers jumpy. Most of the properties are freehold, but ask your agent to direct you in this regard.
|
Niseko, Japan:
|
Savvy Australian powder snow-seekers have been heading to Niseko for a decade, but since 2006 Niseko has become seriously ‘cool’ for ski enthusiasts and investors alike. This popular resort on the northern island of Japan has a snowfall of 15m annually and guaranteed powder from December to April. Niseko is pretty much the same time zone as the eastern seaboard of Australia and only nine hours flying time away – a bonus if you are only planning to be there for a week at a time. Niseko is also popular with skiers working in the nearby-established Asian finance markets of Hong Kong and Singapore, as well as burgeoning markets of Kuala Lumpur, Bangkok and Seoul. According to Michael Davenport, director of Niseko Consulting, the explosive capital gains have been the main attraction for investors combined with the prestige of owning a property in a ski resort famed for its ‘champagne’ powder snow. Like all ski destinations, Niseko is becoming more popular each year with new activities and sponsored events such as Cycle Week. Visitors can enjoy hiking, cycling, fishing, rafting and canoeing during the Summer. Davenport points out apartments in Hirafu upper village have shown the best returns of the entire resort. The good news for Australian investors is that prices have dropped due to the poor exchange rate and economic situation. Prices for some luxury property is at 2005–2006 rates and start at ¥50million and could go as high as ¥200million. Unlike Australian resorts, the property is almost exclusively freehold and Japan and Australia have a trade agreement ensuring Australians investing in Japan do not pay double tax. The Commonwealth Bank has identified such a strong market for investment in Niseko since 2006 that they offer a specially tailored product offering local finance.
|
Aspen, USA:
|
For many skiers, Aspen represents the pinnacle of ski investment property. The trouble is that while luxury apartments were a steal 20 years ago, these days you need a couple of million Australian dollars to buy a decent apartment. And this is before you even fly the family for 24 hours to get there. Despite the high costs, Aspen certainly has the substance to back up the style with consistently excellent powder snow conditions from December to April. Aspen has been a yearround township and tourist destination for more than 60 years with events like the Aspen Music Festival, Aspen Food and Wine Classic, and Aspen Institute think-tank.
|
As with all premier resorts, ‘location, location, location’ still applies in Aspen. In the new Snowmass Base Village, there are several ski-in, ski-out properties available in 2009: Hayden Lodge, Capitol Peak Lodges, Viceroy Snowmass and new Little Nell Snowmass Residences. According to Maureen Porschman, principal of Promo Communications and longterm Aspen citizen, the good news for investors is that Aspen and Snowmass have traditionally maintained value in recessions – or at least have dipped less than other North American ski resorts and recovered more quickly. “People want to vacation here. I don’t think that anyone can predict a return in the current environment, but the quality of the lifestyle experience in Aspen and Snowmass continues to improve,” she says. The on-mountain experience has benefited from significant investment from the owners of Aspen Skiing Company, a privately held company that does not have to rely on the whims of Wall Street. “The towns of Aspen and Snowmass Village benefit from a vigilant and concerned citizenry that have a very low- to no-growth bent. This means that there is very little new development coming on line currently or in the future,” says Porschman.
|
Whistler, Canada:
|
Like Aspen, Whistler is a well-established, year-round mountain community with a full range of outdoor pursuits two hours from Vancouver. The good news is that the Canadian dollar is often more in sync with the Australian dollar, making property investment slightly less expensive than America. According to Patrick Kelly from the Whistler Real Estate Company, now is a great time to be a buyer with properties trading at levels not seen for 5–6 years. “As Whistler has reached its full size, future development is not an issue. Supply is now fixed, so if demand increases the prices should go up. The maturity of the resort gives it a credibility and safety record that few can match anywhere in the world. The 2010 Winter Olympics will reinforce that.” Luxury apartments begin at CAN $1–1.5million and will be located within five minutes of Whistler Village. Financing for non-Canadians can be done via a Canadian bank. Returns over the last 25 years have averaged about nine per cent. Expect rent to cover annual costs and overheads.
|
|
