The global average price of a ski resort home is rising at its fastest rate for eight years, according to the Ski Property Report 2023 by Bayleys’ global real estate partner, Knight Frank.

The report predicts “exuberance” in the European alpine markets to cool in the next 12 months. “That’s not to say we expect prices to fall. But after three stellar years, the economic headwinds will start to weigh on buyer sentiment in the Alps and globally, prompting the rate of annual price growth to slow,” the report says.

Bayleys specialists in New Zealand’s ski resort towns are, for the most part, seeing a similar equation with the addition of some hurdles in the form of building costs and staff shortages, and variations in market performance based on regional advantages and challenges.

A New Zealand ski snapshot

Bayleys head of insights, data and consulting Chris Farhi says since borders reopened in 2022 the tourism market for New Zealand’s key ski destinations in the Central Plateau, Canterbury and Central Otago has generally recovered well, with flow-on benefits for commercial property investments.

“The major ski destinations have seen a rapid recovery of occupancy rates for short-stay accommodation, which is likely attributed to a massive increase in international guests.

“Rental markets are also reasonably tight due to the seasonal influx of workers and some homeowners taking advantage of visitor numbers by offering their homes as holiday homes.”

The Knight Frank Global Ski Sentiment Survey (conducted across 23 countries and territories as part of the 2023 Ski Report) highlighted that when choosing a property, most residential buyers looked for mountain views, high-speed broadband and outdoor space, as well as a mix of year-round activities, and a location within three hours of an airport.

Bayleys general manager commercial South Island, William Wallace says most, if not all, New Zealand ski resort areas meet those requirements which gives those regions ongoing appeal to commercial and residential investors and developers.

“Our ski resort towns are areas of amazing natural beauty that offer more than just skiing. They are places that people from all over the world desperately want to visit. That creates high demand for short and long-term accommodation and, in places like Queenstown particularly, the level of stock is constrained by the landscape.

“That gives investors a sense of security with commercial investments likely to attract high yields, and you’re not likely to have a sudden demographic downfall that unexpectedly changes things. Commercial investors tend to look at these areas as a long-term plan with secure demand,” Wallace says.

Economic volatility impacting access to funding has slowed the development market in ski resort towns to a degree, on par with other regions around the country, but one the largest hurdles facing ski resort regions remains access to staff, Wallace says.

He is confident the problem will start to ease in the next 12 months or so, as people return to a post-pandemic ‘normality’.

“People are moving around more and beginning to just live with COVID-19. As that happens, we will start to see a new influx of people into some of these areas.”

The other interested parties returning to ski resort towns in pre-pandemic numbers are overseas investors, drawn by New Zealand’s reputation as a safe bet in terms of taxes and stability.

“Offshore interest is definitely growing again. Not only is it a very small captive market, which makes it very manageable for investors, it’s also not politically volatile, no matter who is in government.”

Whilst Queenstown and Wanaka might come first to mind in terms of New Zealand ski areas - Methven, at the base of Mt Hutt has also seen a strong, steady influx of investment thanks to its close proximity to the ski fields, Wallace says, the Christchurch CBD also benefits.

“Christchurch offers a great environment to be in year-round, and on those days people aren’t skiing, it has a lot of activities on hand. We’ve seen a lot of investment in multi-use spaces in the CBD,” he says.

Wallace believes the Christchurch commercial market has come through recent volatility well so far, and is comparable to pre-COVID 2019 activity levels. He puts that down, in part, to an influx of new residents moving south to Canterbury from centres like Auckland, looking for a better lifestyle and lower cost of living. “That’s happening in numbers I haven’t seen before in my career.”