The traditional target for property investment in Austria, Switzerland and Germany has always been student accommodation or buy-to-let residential units. High prices, high management costs and recent tax changes have made this market less attractive, and Austrian investors are showing interest in a different target — ski holiday properties.
In recent years, planning restrictions have created a backlog of building projects in ski resorts, with the result that those which are built attract high demand and strong capital growth. And, at the same time, foreign investment in Austria has never been easier.
So what has happened in Austria to create this boom?
- Recent governmental changes promise financial stability. In particular, the new finance minister, Hans Jörg Schelling, is likely to favour policies such as tax breaks for investors.
- The European Central Bank has recently reduced the headline rate of interest, keeping the Euro Libor low.
- The government is offering a savings loophole with a 1% per annum VAT rebate.
- A court recently ruled that Austrian property could be bought by an SPV owned by non-EU citizens, which opens up the possibility of a future flight to safety.
- In the past year, Austrian banks have changed their stance and are showing considerable interest in financing foreign buyers.
- Austria’s bank secrecy act is stronger than Switzerland’s, giving investors peace of mind.
In spite of this, the price in Val d’Isère, on the other hand, the bottom end of the market for a similar unit would be around €380,000, while most are over €800,000. Switzerland is even more expensive, with few 2-bedroom apartments in Zermatt below €500,000, and Davos even more expensive. Prices of Austrian ski properties are still remarkably low. A 2-bedroom apartment in Sölden, for instance, can currently be bought for as little as €334,995, and similar apartments in Ischgl go as low as €323,400. This rises to only a little over €600,000 for penthouse apartments.
Austrian resorts can match or exceed these for quality, and investors have a unique opportunity to snap up valuable property at such low prices. It won’t be long before everyone else wakes up to this and the prices rise, offering a substantial return on your investment.
