How is COVID affecting property prices in the Alps?

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.