Buying Your Slice Of Snow Country
Sydney Morning Herald
Tuesday July 13, 1993
DRIVE out of Sydney on the Hume Highway on a winter Friday and you soon lose count of cars with skis on the roof. It is much the same heading north from Melbourne.
City people head for the snow in greater numbers each year. Most stay in rented accommodation but a growing number of regular visitors buy their own properties.
Snow area real estate can be expensive but not all of it. Anyone who spends a couple of weeks at a skiing resort each year probably could afford to buy his or her slice of the area.
The key question is how far are you prepared to travel each day before you go skiing? At the Thredbo resort village you will pay $500,000 or more for one of the best of the most recently built three-bedroom chalets.
But in Cooma, the NSW gateway to the mountains, you may be able to buy a two-bedroom house for as little as $40,000.
The big difference is that at Thredbo you can step out of your front door and walk to a chairlift. From Cooma you are about an hour-and-a-quarter drive from the skiing areas.
The second most important feature is the time it takes to get to the property from your permanent home. This tends to split the NSW and Victorian areas into separate markets. However, anyone seriously contemplating investing in a skiing area property should certainly look at both.
Skiing is arguably as good in the best areas either side of the border and yet Victorian properties are much less expensive.
For example, a new luxury fourbedroom apartment at Falls Creek can be bought for $275,000. Falls Creek is the closest Victorian skiing area to NSW, and consequently the farthest from Melbourne, but it is still much farther away from Sydney than any of the NSW resorts. Mt Buller is the closest skiing area to Melbourne, day trip distance away if you are keen enough. In terms of the real estate you get for your money, it is probably the most expensive skiing area in Victoria but its property prices are still cheap by NSW standards.
The relative closeness of Canberra is a factor which probably has helped boost prices on the NSW side of the mountains but, even allowing for this, it still seems that Sydney skiing enthusiasts are prepared to pay far higher prices than their counterparts in Melbourne.
It is important to get the travelling into perspective. Thredbo and Perisher Valley are each about five and a half hours' driving time from Sydney and two and a half hours from Canberra. Falls Creek or Mt Hotham would each take about eight hours to reach from Sydney via Albury.
Falls Creek and Mount Hotham are each about five hours' drive from Melbourne, whereas Mt Buller is only about three hours away.
So what does your money buy at and around the various skiing areas?Thredbo's high prices are justified by probably the best slopes and certainly the best facilities, not that this means it is everybody's favourite resort.
Mr Doug Edwards, of Thredbo Real Estate, says the resort's prices always have held up well because of limited supply. The head lease on the entire resort village is held by Kosciusko Thredbo Pty Ltd and the company allows development only to meet demand. The lease runs until 2007 plus a 50-year option. Property owners hold sub-leases for the same period.
Mr Edwards says only a limited number of Thredbo buyers re-sell their properties so most sales are of newrelease properties.
However, he says properties available since before the 1989-90 property market crash were selling at prices about 15 per cent below their initial asking prices by last year. This year, with the offering of about $16 million worth of new properties, prices of older stock have firmed by about 2.5 per cent.
The latest sub-division of small blocks of land at Thredbo recently sold out at prices ranging from $175,000 to $300,000. Very little additional land is expected to be offered.
chalets, $289,000-$435,500; apartments, $172,500-$525,000.
According to Mr Edwards, the special investment appeal of Thredbo properties is that they are a finite resource. At the present rate of development Thredbo will reach its maximum bed numbers in three to five years
Properties at Perisher Valley are on a number of leases. It has been proposed that these be converted to a similar head lease arrangement as at Thredbo. This might allow a limited number of apartments to be offered to investors but, for the present, the best properties available are commercial ski lodges.
The town of Jindabyne, a minimum of 35 minutes away from the slopes, is cheaper than Thredbo but its prices are still more like those of Sydney than a small inland country town. The main reason is that Jindabyne and the surrounding area offer the closest freehold land to the Snowy Mountains National Park and is the entry to all the NSW skiing areas except Mt Selwyn.
Houses in Jindabyne are typically bought by permanent residents while apartments and home units are more likely to be bought as investments by Sydney or Canberra people.
Mr Brendan Neville, of the town's Kosciusko Real Estate, says new large three-bedroom apartments are selling for $175,000, two-bedroom units at about$140,000 and bed-sitters for about $80,000.
Mr Merv Blattman, of L.J. Hooker, Jindabyne, says older two-bedroom units are available from about $83,000. Houses from $150,000 to $180,000 for small two-bedroom properties, and from $180,000 to $190,000 for medium-sized three-bedroom homes. Larger homes, particularly on the lake shore, can be considerably more expensive.
Jindabyne prices have been buoyed by the skiing industry for years. Building developments in the Snowy River Shire have increased by about 4 per cent a year over the past five years and are expected to continue to increase around the same rate for some time, according to Mr Peter Reynders, manager of the shire's town planning services.
Mr Neville says the major cities' property market crash affected the number of sales in Jindabyne rather than prices, although there were a few forced sales at low prices. Overall, he says prices stood still rather than fell. In recent months the volume of sales has been at its strongest since the crash.
Of particular interest to apartment buyers is the council's intention to change its urban planning code to officially allow holiday apartments in all residential areas. There is, however, some opposition to this and zones in some towns may be excluded, Mr Reynders says.
Rural properties around Jindabyne are popular with investors, particularly those along the Alpine Way, the road to Thredbo.
Freehold land is, of course, available only to the edge of the national park but this includes properties in the Thredbo River Valley well above 1,000 metres elevation and almost up to Bullocks Flat, which is the location of the lower terminal of the Skitube underground alpine rail line which gives rapid access to Perisher Valley, Smiggin Holes and Mt Blue Cow skiing areas.
In 1991, a two-hectare Alpine Way block sold for $230,000 but more recent prices have been lower and have included some forced sales. Mr Neville says the latest sale was a similar sized block which sold for $150,000 late last year.
The next settlement away from the slopes after Jindabyne is Berridale. Prices here are considerably lower but have increased markedly over recent years. Prices of good blocks range from $45,000 or less up to about $65,000, according to Mr Neville.
He says blocks facing a sealed road and with power and water are being offered for $60,000-$65,000, while blocks without sealed road access or services might be $45,000 or less.
The value of small rural allotments was enhanced by the council's 1986 decision to allow development on blocks as small as two hectares and to allow dual occupancy developments.
This was intended to allow local graziers to capitalise on the area's growing tourist industry without having to ruin their properties by hiving off large sections. Previously the minimum size rural block on which development was allowed was 90 hectares.
Restrictions on the dual occupancy developments include that they must have the external appearance of a single dwelling and that the secondary dwelling must have a floor space area of no more than 60m sq.
In Cooma, real estate values are little affected by the ski factor, says the local Raine and Horne agent, Mr Don Menchin. He says typical buyers are more likely to be Sydney retirees looking for a country lifestyle away from crime and pollution. He says Cooma appeals to this market as it is an established country centre only an hour from Canberra, and an hour and a half from the coast. Apart from skiing, the Cooma area is noted for trout fishing, horse riding and gliding.
The town's least expensive houses are in North Cooma where most homes were built to house workers on the Snowy Mountains power scheme which began in 1949. These homes make up about a third of the town. Many are still owned by the Snowy Mountains Authority but about 60 have been sold over the past few years. Small two-bedroom weatherboard cottages have sold for as little as$40,000 and larger properties for $60,000-$75,000.
Modern four-bedroom brick homes in good streets generally sell for under$200,000. Vacant housing blocks are available for $20,000-$40,000. Mr Menchin says Cooma property values have appreciated at a steady 3-4 per cent a year over the past 12 years.
Just out of town, three-to-four hectare rural blocks sell for $35,000 to$50,000. Within 8km of the town 40-hectare blocks including river frontage or creek flats are available for $70,000-$85,000.
When you look over the border, Victoria offers a unique category of real estate - freehold properties at a skiing resort.
These properties are at Dinner Plain 1,700m up, eight kilometres from the Mt Hotham skiing area. There is normally plenty of snow at Dinner Plain during the skiing season but, as the name suggests, the slopes are not exactly alpine standard.
A shuttle bus takes you to the steeper slopes of Mt Hotham. Real estate agent Mr John Castran of, Malvern East, Melbourne, says good quality three bedroom chalets sell for about $180,000 at Dinner Plain.
Turning to leasehold properties, a real estate agent, Mr Bruce Bell, of Collins Simms, Melbourne, says two-, three- and four-bedroom apartments are available at Falls Creek from $130,000 to $275,000.
At Mt Buller, properties available range from small older style onebedroom flats for about $82,000 upwards, says Mr Michael David of real estate agents R.T. Edgar Alpine of Toorak, Melbourne.
Mr David says new apartments to be completed at Mt Buller for next winter are expected to be marketed at prices ranging from $125,000 for one-bedroom studios to $400,000 for luxury three- to four-bedroom apartments. Ownership of these properties will include free skiing for life through membership of the Mt Buller Sports Club. Memberships are sold separately at $15,000.
Mr Bell says private buyers may be interested in a few small club lodges available at Mt Buller for $130,000-$175,000. These 1950s and 1960s properties are likely to be in need of repair and might be regarded as redevelopment opportunities. Most are on 800-square-metre blocks of land and accommodate 16-20 people in four bunk rooms, he says.
The variable nature of tourism and the seasonal appeal of skiing make it wise to regard ski area properties as speculative investments. Rents can be high in the peak season but demand is low during the summer period. However, overall returns can be impressive for properties with good access to the slopes.
Mr Edwards says a small twobedroom apartment in Thredbo can be let for about $2,500 a week during the eight week peak season and for about $1,600 for the further eight weeks of the shoulder period. But during the summer it may be only possible to let the property for much lower rates over short periods at Christmas and Easter or for special events.
He says that after meeting management fees and all other costs, Thredbo properties can return yields of 5 per cent to 6.5 per cent. This, it should be added, is assuming full letting only through the peak period so the owners would be able to use a property for their own skiing holidays in the shoulder periods and through most of the summer.
Mr David says that on a similar basis Mt Buller properties can yield 7 per cent because of the lower capital investment needed.
Mr Bell says Falls Creek properties can achieve similar peak rental returns to those at Thredbo and last year also attracted strong summer lettings.
Managements of most of the main resorts are working on developing year-round appeal by promoting summer activities such as horse riding and trout fishing and offering their facilities for conventions and sports events
Apartments in Jindabyne might be able to equal the yields of those in Thredbo as lower capital investment largely compensates for lower rents.
However, properties in towns without such easy access to the slopes would be unlikely to perform anything like as well.
© 1993 Sydney Morning Herald
