New or old: what strategy should buyers take?

Real estate at the major resorts in the French Alps, like elsewhere, is divided into two categories: new and old. Should buyers consider whether to invest in one rather than the other? Benjamin Berger, CEO of Cimalpes, gives us his take on the question.

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Is it better to buy old or new in the mountains?

In fact, there are opportunities in both. I don't think that the two categories should be pitted against one another, meaning that one or the other is excluded from a buyer’s search. The primary motivation for almost all investors at mountain resorts is a lifestyle purchase for themselves and their families, and their main criteria are generally not related to the question of whether to buy new or old. What’s more, there are limited numbers of properties for sale in Courchevel, Megeve, Meribel, Val d’Isere and Saint-Martin-de-Belleville, the 5 resorts where Cimalpes is established: buyers therefore need to study the market as a whole, both old and new properties alike, to find the best opportunity, and they are well informed and advised.

What are the advantages of a new build?

I would say there are four main advantages. A new development is usually designed with market demand in mind, and thus has a good chance of fulfilling the aspirations of buyers. As they are generally put on the market before breaking ground, changes can often be made to the plans so as to best align the property to the buyer’s expectations. In addition, VAT, i.e. 20% of the price, can be refunded when buying a new build if one of three conditions are met: the purchase concerns a secondary residence, the property is rented out, and it includes hotel services. Buyers themselves can also take advantage of these hotel services. Today, a group like Cimalpes manages several dozen new properties, the purchase of which enables the owners to save on VAT, to collect a rental income to cover the charges and to take advantage of the hotel services on offer.

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And what about old builds?

Old properties also have advantages. Firstly, their rare charm, with aged wood and stone that give unrivalled authenticity. Secondly, location: Ski-in/ski-out and in the centre of the resort, which is difficult to come across. Thirdly, the opportunities to be seized by those willing to convert two or three small units into one large unit, because the price per m2 in the mountains decreases in proportion to the overall surface area. Fourthly, the potential capital gain on rental or resale is linked to how the property is made more attractive, either throw renovation works or an extension.

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