by Jordan McMullen

Originally published on AFR here: http://www.afr.com/real-estate/why-you-can-buy-real-estate-at-mount-hotham-for-14k-20160401-gnw25w?

On Easter Saturday, a site at Mount Hotham on the Victorian ski fields sold for just $14,000 - well short of the $140,000 once being asked and the "cheapest" on the mountain in 35 years according to veteran agent, John Castran.

There were specific reasons.

The site was on a relatively short-term, 40-year ground lease, with substantial annual rates, and was sold by a vendor prepared to sell for a dollar.

But Ron Bassett, the venture capitalist and fund manager who was once the executive chairman of BCR, blamed the collapse in values on the lack of investment in the resort.

Under Mr Bassett's leadership, BCR bought both Mount Hotham and the nearby Falls Creek alpine resort, investing $100 million in the resorts, including $20 million on the Mount Hotham airport, before selling out in 2003.

Mr Bassett said BCR's last development, Keogh Orchards and Gotcha ski lifts in 1998, increased the accessible skiable terrain by 50 per cent, but that no further development had taken place except for snowmaking.

MAJOR FACTOR

"There is no question that this is a major factor in the fall in real estate prices in Mount Hotham and Falls Creek." he said.

"You have to improve ski slopes and give people somewhere new or people won't have a reason to come," he said.

The Mount Hotham airport had regular Qantas flights from Sydney and Melbourne from 2003 to 2014 but now only handles private flights.

A 30-year resident of the area said that access to the ski fields for people outside of Victoria had become very hard, with an irregular bus service from the nearest airport, at Albury.

"It's disappointing that the resort management hasn't encouraged a public transport operator to provide anything in the area," the resident said.

"Property prices are a symptom of Mount Hotham's problem not the cause of it," said former BCR Executive Chairman Ron Bassett about the sale of his unreserved blocks on the weekend.

SOLD AND RESOLD

BCR sold the Mount Hotham and Falls Creek resorts and airport to the MFS Living and Leisure Group in 2003, which became the James Packer controlled Living and Leisure Australia.

In 2012, the resorts were sold as a part of a $140 million package to Merlin Entertainments, the $8.5 billion global heavyweight which owns and operates attractions like Legoland and Madame Tussauds, but not any other skifields.

Mr Bassett said Merlin had contributed to the stagnation on the two skifields.

"If we compare the deal with the Vail Resorts purchase of Perisher, the companies have come into the market with entirely different strategies," Mr Bassett said.

Vail Resorts, the $6 billion leading mountain resort operator in the US, followed its purchase of the Perisher resort in NSW last year with the introduction of an "Epic Pass" that gave Perisher skiers access to Vail's resorts in North America.

Merlin Entertainments' Mount Hotham Business Development Director Helen Moran said Merlin's focus was primarily on maintaining the high standard ski fields for customers.

"Merlin Entertainments have invested more than $14 million in supporting this business strategy, including $6 million over the past two summers on completing the build out of the snowmaking system at Mount Hotham," she said.

Mr Castran said that many other factors had affected Mount Hotham real estate prices.

"The GFC, the rise in fuel prices, the strong Australian dollar, the decline in ski industry world-wide and the Perisher takeover have all affected Hotham in the last decade," he said.