Alpine Property Search founder, David Bhagat, says that there’s no better time for Ultra-High Net Worth individuals to invest in
ski property as data suggests their assets continue to rise.
With interest rates continuing to be so low, property has become a more important component of ultra-wealthy individuals’ portfolios - the sort of people that do not typically rent their homes out so are not looking for income yield but rather safety and return OF investment rather than return ON investment.
During 2017, the number of UHNWI (Ultra-High Net Worth Individuals with assets of US$50m+) worldwide rose by 10% to 129,730 with total net worth of US$26.4 trillion. This is a significant rise, as during the previous five years the cumulative increase totalled just 18%. *
Bhagat, of Alpine Property Search, said: “In the case of Switzerland the restrictions on further new building will inevitably have an impact on supply and demand and should lead to higher pricing power for owners in future. Allied to the inexorable rise in the value of the Swiss Franc, a Swiss property can be seen as an important component of a UHNWI’s overall portfolio. Switzerland has a very favourable tax regime for wealthy foreigners looking to live in Switzerland and certain cantons also have zero inheritance tax, such as Valais.
“Kitzbuhel in Austria also demonstrates many of the characteristics of Swiss property as a safe haven. For example, prices here have risen every year in the past 32, even during the financial crisis. Kitzbuhel property was seen as a safe bet when asset prices everywhere were plummeting”.
In Japan, despite the lack of rising property prices over the past decade, 2017 saw the first national increase since 2008, with commercial property rising by
1.9% nationally. But, crucially in certain areas including around Niseko, Japan’s premier ski resort, commercial land prices rose by 36% and residential land prices by 33%.
Bhagat said: “Switzerland and Japan share the characteristics of large current account surpluses and safe haven currencies, both of which are strengthening against the USD - despite both countries’ other shared characteristic of record low interest rates and with 10
-year Government bonds 0.01% in Japan and 0.11% in Switzerland. As wealthy foreigners from the US, Australia and Asia pile in, a virtuous circle is being created whereby local and Asian developers are responding with ever higher-end luxury offerings, driving interest from ultra-wealthy investors looking for a ‘
safe haven' closer to home ”.
