Agents are bracing for an avalanche of foreign buyers they expect will snap up ski chalets in Switzerland ahead of tightened restrictions on their construction.
In one of five national referendums held in the alpine country last month, voters agreed to a proposal to limit the number of second homes built in resort towns. Their decision follows a decades-long building boom in the Swiss Alps, during which the number of beds in second homes reportedly rocketed from about 600,000 to 1.3 million since 1975.
As a result, starting on January 1 next year, no more than one-fifth of any Swiss community's housing can be sold for second homes. In areas where this market sector already accounts for more than 20 per cent of the total housing stock, this effectively means that no more can be built.
The impact will clearly be felt in the Alps, holiday playground of the rich and foreign. But 'this is not a Swiss/foreigner issue - even the Swiss will not be able to buy a new chalet in the mountains now', says Simon Malster, managing director of British-based Investors in Property, who has been selling in the Alps since 1986.
Some analysts say that the success of the referendum, championed by an environmental group opposed to overdevelopment, will spur wealthy foreigners to buy this year, pushing prices up.
Malster asserts that it's happening already. 'One developer has asked us to take all their properties off our website as they are repricing them,' he says.
Robert Ferfecki, managing director for Sotheby's International Realty in Zurich, agrees that a price hike is likely.
'It is already today very difficult to find nice holiday homes; this will certainly make it more difficult in the future,' he says.
In any case, Ferfecki says he is already swamped with inquiries from rich foreigners - primarily Europeans and Russians - seeking luxury Swiss property as a means of asset protection. Greek investors are frequently calling wanting to buy a house there, he says.
In a recent interview with The Wall Street Journal, Ferfecki noted that 'had Switzerland no restrictive property laws that limit what foreigners can buy, I would probably be able to sell my portfolio within a week'.
But it does have restrictions, which means that for most foreigners, alpine property is their only option. 'Most foreigners are not aware that they can only purchase real estate in Switzerland when having a valid Swiss residence permit,' Ferfecki said. 'This means that their centre of life must be in Switzerland and accordingly they are taxable in Switzerland. The only exception to this rule is a holiday home of limited size. All are located in tourist areas - the alp regions - with a so-called Lex Koller-exemption, and they can be bought by any foreigner without proof of Swiss residency.'
Such properties, however, are 'very rare and hard to find', Ferfecki says. One of them is the Lakeview, which will be built in Vitznau, Canton Lucerne. 'This development with its super-rare lakefront location offers apartments and villas starting at 130 square metres and 1.5 million Swiss francs (HK$12.73 million).'
Malster also says inquiries have been non-stop since last month's referendum, building on already hot demand. For two years running (2011 and 2010) Malster has come to Hong Kong to do sales presentations. 'We have many clients there,' he says.
Particularly in demand are the Verbier ski areas of Les Collons, Veysonnaz and Nendaz. One property which is 'perfect for investors looking to have their apartment professionally rented and managed when they are not using it' is the Titlis Resort in Engelberg, about 90 minutes from Zurich. The development is comprised of nine chalet-style buildings each with from seven to 20 apartments with a reception, restaurant and large spa. 'It is located near the foot of the slopes just 200m from the Titlis lift, five minutes' walk to the centre of the resort and with great views,' Malster says.
Engelberg has a long ski season, from November to May. Construction has started on the first phase of four buildings and the first apartments will be delivered in November next year.
Already, several Hong Kong investors have bought in Les Collons, a 'sure-snow' resort with a big ski area which is easily accessible from Geneva. 'Set at 1,800m this is the best of the villages linking into the Verbier ski system, which has over 400km of pistes up to 3,330m offering the most challenging skiing in Switzerland. Les Collons is the highest, it faces east and south and has the best views looking up to the Matterhorn,' Malster says.
In this idyllic location is the Chalets du Rhone, a phased development of 17 chalets. After the first two stages were sold out, the third and final phase has just been released and already three of the seven chalets have sold.
For those who already own a getaway in the Alps, Malster reckons the new quota decision has instantly added value. For the multitudes of foreign investors he expects will rush to buy this year, there's a kicker too, he says. 'If you buy now you will still be able to resell to a foreigner in future, and as your property will have second-home status, it will appreciate in value.'