+ THE MARKET RETURNS – OR DOES IT?
Hot off the press overview of the latest French property prices
The latest property sales figures are out for the first half of 2010, and several French magazines (including L’Express, Le Nouvel observateur, Le Point) splashed headlines anticipating a return to a strong market on the Côte d’Azur. Those of us in the business have been pouring over the figures, squinting intensely and trying to make sense of the tables (and feeling a distinct sense of déjà vu). Unsurprisingly, the real story is a little less dramatic than the headlines make out.
Certainly, the French Riviera has been protected from the worst of the crisis with property prices falling far less here than other areas of France. Traditionally, the Riviera is seen as a safe haven for property investment and it continues to be a good bet. What has happened over the last couple of years, however, is a slow down of the market, more scope for negotiation in price, and far less good quality apartments and villas on offer as people have decided to wait it out.
What hasn’t changed is that a good property in the right area has kept its value more or less. That means prime areas (such as the chic Mt Boron area in Nice, and anywhere with a decent sea view) have seen prices drop only slightly. Unrealistically priced properties are now finding a more sensible asking price. No doubt there are bargains to be had, but it’s a lucky find rather than the standard.
Number crunching 2010
So what are the figures? For Nice, the Côte d’Azur’s major city, the price has dropped 5% drop over the past year (April 2009 to March 2010). The Alpes Maritimes region as a whole has also seen a 5% drop. But according to Le Point, the centre of Nice has had a 3.9% increase (figures from May 2009 to May 2010). However, as there are so many variables that make up these figures (areas covered, time frame, renovated versus unrenovated, based on asking price or actual selling price, etc.) they cannot be taken as stand-alone, definitive figures without some serious analysis.
What we can say is that a renovated older style apartment in the centre of Nice is averaging between 4,000 to 4,500 euros per square metre. Anything close to the sea, then the price goes up to between 4,500-5,500 euros. Compared with Paris, where the cheapest inner-city quartier comes in at around 5,500-6,000 euros per square metre, and the most expensive is 10,000 to 12,000 euros, then Nice is good shopping.
Looking beyond Nice on the Riviera, the line is drawn between those who will pay several millions for an exclusive villa, sea view and privacy (although not the crazy prices we were seeing a few years ago with the influx of Russian oligarchs), and the rest who want to see a fair price for an apartment or a more modest villa. The story is the same as Nice, with prices settling to a more realistic level and room to negotiate. In Cannes, this means around 5,000-7,000 euros per square metre in the prime ‘Banane’ neighbourhood for an apartment. Antibes hovers between the 4,000 to 5,000 euros bracket. A villa in Mougins or Antibes averages around 5,000 euros per square metre.
However, as I explain to clients who want to measure everything neatly in price per square metre, these figures can never be the whole story. They are a general guide; useful, but only a guide. When helping clients to find a property, I assess each apartment and villa individually and carefully, taking into account many more factors than the price per square metre. This means size, neighbourhood, street, style of building, new versus old property, terrace, parking, sea view … the list goes on. Only someone who lives in and knows the area can offer this advice.
The question I am asked constantly is, ‘What will the market do over the next year?’ I wish I had an answer. What I am pretty certain about is that things are not about to change quickly. We have seen prices come down and sellers and agents willing to negotiate (roughly 5-8% is a good guide). Good small city properties (studios, and one and two bedroom apartments) continue to be in demand due to a lack of quality on the market and the accessible price range. The middle bracket range – 400,000 to 800,000 euros - is having a harder time. But the high-end of the market continues to move as investors seize the opportunity.
Of course, much will depend on the global situation. Foreign buyers, who traditionally make up a large part of the Riviera’s property market, have made a tentative return. The strength of the dollar has seen a small American buyer flurry and the Italian investors continue to cross the border.
With a lack of good quality choice on the market, however, a big part of my job at the moment is sifting through the range on offer and finding the truly worthwhile gems. As I tell my clients, don’t be hasty and choose wisely.