Real Estate - Talk #3: Market Trends and Tourist Rental

Real Estate – Talk #3: Market Trends and Tourist Rentals in Schladming, Ramsau and Tauplitz

FINDMYHOME.AT / Premium Living in the interview with Fabio Perali of RE/MAX Nature 1.

Market trends

The region has long been popular. However, after a certain point, interest rose sharply once again. What reason do you see for this?

In this region, 10 years ago, the preparations for the Alpine Ski World Championships 2013 were underway, which was of course a huge event! That is why in 2006/2007 we were awarded the contract to host this World Cup, which meant that interest in real estate in the region increased even more than usual.

How are locals feeling about rising prices?

In 2014, the first new construction project with apartments in the center reached the 5000 euro/m² mark. Despite the great discontent in the community, all apartments were successfully sold. After the grandiose World Ski Championships in 2013, many locals gave their opinion thus: “The real estate bubble in our country will burst, it’s a madness.”

How have prices developed after the World Cup?

Until the beginning of 2020, to the COVID pandemic, there was a continuous increase from then on. In our country, you could already get in 2018 and 2019, used apartments in good locations still around 4000 to 5000 euros / m². Newly built apartments were already in the range of about 5500-6000 euros / m². Properties came on the market about 5-10 a year until 2019, but since 2019 it has felt like only 2-5 properties. The prices for these plots vary greatly and are totally dependent on the location. At that time, nice “average plots” were available between 150 euros/m² (Gröbming area) and 250-350 euros/m² (Schladming surroundings).

What trends can be observed since COVID?

The pandemic has catapulted many things, almost everything, into the utopian. You could say in many areas, but with us it is even more extremely noticeable. Each type of property has achieved within these 2 years, another increase of at least 20%. Especially land and also certain attractive properties have reached even loose 30-40%, since March 2020.

What could be the reasons for this?

The main reasons for this were probably inflation, i.e. that people no longer wanted to deposit their money mainly in banks, and also that in times of crisis they long for a place of refuge, one could also say a paradise.

Does second home regulation affect supply and demand in these regions?

This is a very large and multi-faceted topic.

I personally feel it doesn’t really affect supply and demand. Why this is so, however, is certainly beyond the scope of this interview.

Tourist rental

Where are the most attractive investment opportunities at the moment?

In our region and with the current very low supply, any, really any type of property is an attractive investment opportunity!

From the point of view of yield, centrally located apartments near the ski slopes, which can be used for tourism and rented out in the absence of the owners, are the most interesting.

What makes these locations so attractive?

In times when après-ski is also enjoying great popularity again, short distances and walking distance are almost a small luxury. Because people are definitely happy if they don’t really have to use their own car during the ski week and can just leave it there. But here I am talking specifically about the hotspots Schladming and Haus im Ennstal. There, with the first-class 4-mountain ski circuit, you can actually get from one mountain to another on skis, without a car.

What is the advantage of tourist rental for one?

Tourist rental offers owners the opportunity to achieve an extremely good “return on investment” – especially in very good locations!

This means that due to the popularity of the region and the many guests, you can achieve a great occupancy rate of the respective apartment, which accordingly has a positive financial impact at the end of the year.

Do I have to actively look for tenants myself, or is that taken care of under certain circumstances?

There are tourist agencies that, in exchange for a percentage of the rental income, do all the work for the owners.

From marketing to mail traffic, from guest relations to cleaning, all of this can be taken care of. Which ultimately means “hand over the keys and sit back” for the owners.

What returns can you expect if you invest in good locations as things stand today?

Of course, this depends on many factors.

For people who want to invest “today” with the exploding construction prices and equally tightened real estate prices, the return on investment is certainly no longer the most important point. The people with us want first and foremost to simply “be”. This may sound romantic, but it is actually the case in times of crisis. Therefore, in my experience, it is not so important to people whether now 2-3-4 or 5% yield from a possible tourist rental.

Thank you very much for your time and expertise Mr. Perali!