Joyeux Noël
Happy Christmas
From Côte Abode

Blue skies over the Côte d'Azur

What is in store for the French Côte d'Azur property market this Autumn-Winter 2012?

Returning home to Nice from a trip to the UK this week I had one of those moments. (In fact, I have these 'moments' quite frequently.) The plane flew low over the sparkling Mediterranean sea. As I glimpsed the Promenade des Anglais and the terracotta roof-tops below, I felt overwhelmingly happy.

As artists from Matisse to Picasso and many many more appreciated, the light of the South of France has a quality that seems especially magical after the grey skies of Paris, London, or other Northern cities. It lifts the soul. You actually feel spiritually (and physically) lighter as the coat is discarded and the dark glasses take up their familiar place over the eyes.

But what has light and sunglasses got to do with the property market? Well, in these rather grey and grim global times a touch of blue sky optimism can't be a bad thing. 

A market divided

There is no doubt, even the protected Côte d'Azur has been knocked back this year. Less buyers, less sellers, a change of government, a schizophrenic Euro situation, less credit available and less properties of quality have all combined to make life hugely difficult. Ask an agent and they will typically tell you that all is just fine. Ask a Notaire and they will give you a more honest opinion based on transactions (down and continuing to fall now we hit winter). Some are doing better than others, but some are struggling. (One notaire told me that if it weren't for sales of private garages she would be really worried about her income.)

The reality is, however, that the French Riviera property market contracts and wobbles but doesn't collapse. The majority of sellers and buyers in these current circumstances will bunker down and wait, and wait and.... 

But how long should one wait? I have clients holding off until next year, while others are leaping in now wanting to grab 'a bargain'.  But quality and stock being limited, bargains are not easy to come by. My biggest fear is that  we are in  a prolonged period of unrealistic expectations on both sides - the buyers who want  too much of a drop and the sellers who won't move on silly prices for average abodes. This always ends in a predictable stale-mate.

From bijou to luxury 

An unscientific poll of the notaires and agents that I know reveals that the slowest sector of the market at the moment without a doubt is the €500,000 to €1 million range (which is effectively a large apartment on the French Riviera). Traditionally this budget attracted both French and overseas' buyers. With an absence of both, this tier has flat-lined.

So what is moving? Smaller investment apartments - studios and one bedrooms - in cities like Nice and Cannes continue to attract cash buyers with an eye on rental return plus the desire to own a bolt-hole in the sun. It is perhaps not moving as quickly as in the past but this sector continues to be within the reach of more buyers.

The other level  - perhaps surprising, perhaps not -  is the high-end luxury property market. As one nationality falls away (British, Americans, Italians...) another is waiting to step in - Australians, South Africans, ex-pats from the Middle East and Asia, and of course the Russians (who never go away). Many rich have remained rich, or got richer. Prices have become negotiable and this makes the Côte d'Azur more appealing than ever. 

Where once an apartment in St Jean Cap Ferrat seemed unattainable, it now looks possible if you have a million or two. Slightly higher up the luxe pecking order, the historic waterfront property Palais Maeterlink on Cap de Nice sold this year for 48 million euros to a billionaire Czech property developer. Who knows what he would have paid if times had been better. The point is the big spenders are still spending. The plans for Maeterlink are to turn it into luxury apartments. Seizing the moment will, the hope is, beget future returns a hundred-fold (or a million-fold).

And next year?   
Hollande's latest backtrack (and we knew these were coming - indeed, had to come) is to reduce capital gains tax on second homes and rental properties by 20 percent for next year. It's a one-off concession for 2013, but if it is passed as law it will offer a little hope to kick-start a sluggish market.

Whatever people's fears are for the future, the Côte d'Azur at the moment seems to offer a chance to buy in to an area that might not be so affordable in a few more years once the property cycle has come full circle again. 

Would I buy now? Yes I would, but carefully and at the right price. Light can be blinding and play tricks, hence the need for dark glasses and common sense in this market.

For information and assistance on buying on the Côte d'Azur, please contact us 
home@coteabode.com. or visit our website www.coteabode.com.

Slow shopping in Nice

Nothing is more tantalizing than a local French market on the Côte d’Azur

One of the first things I do when I visit a new place is to check out the local market. I have to say a recent trip to Barcelona left me disappointed. Rather a lot of salt cod and tired fruit and vegetables. Maybe it was a bad day, but it didn’t bring out the usual cook in me.

By contrast, coming home to Nice on the French Riviera was an inspiration. Sometimes you need to leave home to appreciate home.

Saturday morning I grabbed my shopping bags (I know that I should paint a scene of Provençal wicker baskets here, but as locals we use plastic reusable Carrefour supermarket bags) and headed for our very local, local market.

Every day, except Mondays, stalls set up outside the church square in our neighbourhood, St Roch in Nice. It’s a small city market but it has everything you could want in the way of fresh seasonal fruit and vegetables. It’s a pleasure taking the time to shop like this. The stall owners all want to know what you are cooking, offer their opinion and recipes and always throw in for free fresh bunches of basil, parsley and some lemons.

Glorious food 

There are bigger markets in Nice such as the Cours Saleya in the Old Town (we leave it to the tourists for most of the year, especially the summer) and at Liberation (a fabulous huge Niçoise market). But we are spoilt having this little one our doorstep. This Saturday I headed home with baby aubergines, sweet tomatoes, glorious peppers (perfect for making the traditional Provencal dish of legumes farci), rose-tinged garlic, fresh salad, roquette, melons, nectarines, flat white peaches (to be eaten immediately with great greedy slurping noises), local olive oil … with, of course, armfuls of the ubiquitous heaven scented basil for a pesto feast.

The local butcher is another stopping off point. Seats are placed around the counter as you need to wait and chat, and wait and chat. That’s how it is done here. Slow food at it’s best. The outdoor farm chicken I picked out, although thankfully dead, still needed its head and feet cut off, and insides removed (and given to me separately for pâté or to enrich a sauce). The remnants of feathers were then blow-torched. Seasoned inside and out with Provençal herbs and trussed, I finally had my prize.

Then there is the boulangerie … but you get the picture. By 12ish you are home having spent 2 hours or so doing the food shopping (3 if you stop for an espresso) and are ready to cook lunch.

The phenomenon in the UK, US and other Anglo countries of farmers’ markets doesn’t happen here. Every market in Nice is a farmers’ market of sorts. It is a way of life in the South of France, even in the cities. It’s a manner of shopping that takes time and couldn’t be more enjoyable. If you are visiting the Côte d’Azur, there will be a market near you, so please do get up early, grab your plastic carrier bag and check it out.

For information and help buying property on the Côte d'Azur, contact us on home@coteabode.com

website www.coteabode.com

THE INSIDE VIEW UPDATE

Hollande's new taxes

Following on from my last post, it has been pointed out that the tax increase on rent revenue for second homes will apply to unfurnished properties only. This means very few non-French residents will see any change in their status as most second-home owners who rent out do so as furnished lets.

So, even less for people to get worried about.

THE INSIDE VIEW

Hollande's proposed new taxes for second homeowners in France

I have been mulling over several ideas for posts recently (I tend to have too many in my head at any one time, causing perpetual writer's block). However, the latest announcement from President Hollande's camp about how they are to raise revenue by taxation has finally managed to galvanise me.

By now most second home-owners in France will be in panic mode thanks in part to hurried newspaper reports in the Daily Telegraph and Daily Mail. We have been here before. Most recently with Sarkozy's defunct second-home tax (thrown out by Parliament last year, but I still have people ask about it as though it exists). Most newspapers seem hardwired to splash sensational headlines and can not be bothered to investigate or explain details further. I guess this is instant journalism - the McDo media (as McDonalds is known here in France).

The latest tax announcements come as little surprise. Hollande is making his mark across the business and banking sector, and we all knew that was coming. What worries the foreign second-home owner market is his proposed rise in capital gains tax and rental income tax. Nothing has become law yet, but it is looking likely to do so as the Socialists hold the majority. That said, there is a good chance the proposed law will be challenged under EU law (as Sarkozy's second home tax would have been if the French Parliament had not rejected it in advance).

It is important to pause and look at what is proposed and offer a counterpoint to the headings that scream 'French Tax Grab on Holiday Homes'.

Capital Gains Tax increase
For second homes owned by EU foreigners, Hollande is looking to increase the rate from 19% to 34.5%. This will effect EU second homeowners only.  Currently French residents pay the full rate of 34.5%. Non-EU second homeowners (e.g. US, Australians, South Africans, Canadians etc) already pay 33.3%.  This means everyone, be they French, British, Russian, American, Chinese, will pay almost the same rate across the board.

The controversy in part lies in the fact that the increase is labelled as 'social charges', which will ultimately prove to be the legal challenge. If it does pass to become law, however, British and other EU residents will simply pay the same rate as French and non-EU residents. The sliding scale (deduction by percentage points after year 6) will still apply, as will tax relief for renovation and improvements.

Thus the longer you hold on to a property, the less you will pay in capital gains tax (assuming and hoping there is a profit when you sell). As well, if you own a property under the SCI scheme (limited company for property purchases), then different laws apply to you.

It may be irksome as a British second homeowner suddenly to have this hike, but the logic is that it brings you in line with your French and non-EU colleagues.

Rental tax
Raising rental income taxes from 20% for non-residents to 35.5% again is based on 'social charges', so no doubt this will be challenged as well if it is passed by Parliament (the legal argument being that non-French residents should not have to pay social charges in a country they do not reside in).

I think this rise is a foolish move by Hollande. Not only will it scare away less experienced overseas investors but it will probably encourage more second homeowners who are renting out not to declare or to be creative with their accountancy. Obviously those who are not renting out (and they tend to be the wealthy) won't be concerned at all. Those that do, as I say, will find ways and means to either not pay or reduce the shown profit.

However, I also have to say that I am perplexed when I talk to many second homeowners here. They often feel aggrieved to be paying any tax at all on their rental incomes. For some strange reason, in their world, buying a property in another country exempts them from the normal laws that would apply in their own countries if they were landlords. It is a bit like they are living life on a Monopoly board with fun money. These same people grumble about paying the standard (for all owners) Taxe Foncière (land tax) and Taxe d'habitation (council tax). When I suggest we stop having their rubbish removed, ban firemen turning up to put out a fire in their home, refuse to send police when they have a break-in, leave the street outside their house unpathed etc, they look blank.

The point is if you are earning an income, you pay tax. Whether that money is earned in another country makes no difference. The amount you pay will depend on a number of factors and a good accountant should be able to offset most expenses against the income you make from the rental.

Good news for buyers

More tax is never fun. Hollande's new approach will upset many. However, the Côte d'Azur property market will continue to flourish and the smart investors are already swooping as they prey on sellers' nerves. The last time I saw this happen was end of 2011 when the Capital Gains time limit was raised from 15 years to 30 years (by right-wing Sarkozy, please don't forget). At the end of last year, I managed to save tens of thousands off the asking price for several of my clients as we hit the right moment to negotiate.

I also think it is worth remembering for the nervous buyers and sellers out there that governments come and go. Five years from now who knows what will be. It's not the time to make a quick buck, that's for sure. But as we have seen from the financial mess we are in, stability and long-term growth are far better bets for the future.

If you would like professional assistance buying on the Côte d'Azur, please contact us at home@coteabode.com or telephone 0033 (0)623630779

LEMON COTE D'AZUR

I'll step away here from the property market  on the French Riviera for once.

The lemons have been falling from the trees in my parents' garden in Nice. Although they live only 5 minutes walk from the beach and the Promenade des Anglais, they are one of the lucky few to have a private garden in the centre of town. The apartment with a garden (in a chateau no less, and yes really it is in the city) was chosen entirely on the basis of the dog needing outside space. But that's my family.

Anyway, thanks to Rosie the dog we have a reliable source of lemons, bitter oranges (best for marmalade making) fresh herbs, lettuces, tomatoes, stunning roses and so forth depending on the season and my mother's planting whims. The lemons are luckily an annual constant, however.

I live across town in a martini-modern penthouse. Granted it is chic and has fabulous views of Nice and the sea, but my parents' garden is a refuge now that summer is here. A little paradise in the city.

And the lemons? In the past we have thrown a limoncello party in January with friends and made bottles of the divine Southern Italian drink. This means trips to the pharmacy to get our quota of pure alcohol. (As my mother and her friends limp in with mystery ailments, the chemist always says 'ahhh, limoncello season is it'?) and to Italy, half an hour away, where sale of the 90% proof is less regulated. The magical potion of alcohol, lemon rinds and bay then sit on the dining room table for several weeks marinating before sugar syrup is added to make the yellow nectar of limoncello (nothing like that horrible sweet stuff you get in Italian restaurants, by the way).

This year, however, we have been a bit preoccupied and let the January party slip away (some lemons did go to Sweden with friends who rather wonderfully created a Northern version of the Nice limoncello party this year).  The lemons are now destined to be preserved. I'll serve them late Summer with a Moroccan tagine on a sultry Côte d'Azur evening.

By the way, there are a couple of apartments for sale in the Nice chateau where my parents live. Well, I couldn't resist adding that, could I?

For help buying a property on the Côte d'Azur, please contact us www.coteabode.com or email home@coteabode.com

THE VIEW

A Côte d'Azur property is all about the right view 

When doing a search for a client it quickly becomes obvious that there is always one ingredient that is more important to them above all else. It can be location, it can be space, it can be architectural charm. However, more often than not it is the view. This seemingly simple request for a 'view' has led me to some of the most magnificent villas and apartments on the French Riviera. However, equally over the years I have been shown some shocking examples. Ones near Nice airport are usually the most irritating. Sea views and ... industrial landscape and planes!

The rationale here on the Côte d'Azur with sellers and agents is that a view of the sea is a view of the sea. This means your property must be worth far more than one without a view of the sea and is far more desirable. Well, no actually. You see, not all sea views are the same. There is a magnificent sea view in a desirable location - and this is without a doubt a property price hike to the super-league. Next is a great view but wrong location (Nice West and the far-end of Promenade des Anglais, for instance, are more affordable areas agents are fond of touting for 'views', but frankly not a place to invest). Then there is a so-so view (usually a glimpse of the sea between buildings or if you crane your head out of a window). This sort of view is second best and quite honestly it doesn't deserve the extra 'sea view' price tag. Finally, there is the sea view that should work but just doesn't.

I have seen a few of the latter category recently while on a 'view' hunt for a client (it started with thinking the style of building was important but it quickly became clear the sea view was the thing). We narrowed the area to Villefranche sur mer or close to it. The budget was good enough for a two or three bedroom apartment in this expensive location (prices round Villefranche can reach €12,000 to €15,000 per square metre). You would think it would be an easy search. It wasn't.

It usually goes like this with agents (not all but generally). First they want to show the properties that have been on their books for years (yes, often years!) or ones where they are friends with the owners. This is in part due to a delusional hope I will suspend all my aesthetic and business judgement and allow my client to visit (I don't), and in part to appease owners who want to see that a certain number of visits have been clocked up. Once that formality is over (and actually I don't mind this as it means I can see the market and give feedback to clients), I get down to business of seeing the interesting and new properties.

This search I saw some fabulous views, but not so fabulous apartments. Or fabulous apartments but the so-so view rule came into play (usually squeezed between buildings). But the most depressing category has to be the view that should work but simply does not. Usually this means if you keep your eye on the horizon all will be fine, but don't look down, left or right.

The runner-up in this category in my latest search was an apartment that gazed out over the beautiful Villefranche Bay. However, look down and there was a particularly grim car parking lot, look left there was some kind of ravaged cliff with houses about to fall off - held up there by chicken wire. However, the overall winner went to the apartment that had the sea view but when you looked down from the terrace you enjoyed the cemetery. And we are not talking a quaint cemetery with overgrown ivy here. This was modern grey tombstones in rows a-go-go. The agent slightly ironically (but only slightly I fear) piped up that 'there would be no noise from the neignbours'. Quite.

Anyway, the point is that not all sea views are the same and what you see on the internet is in reality far more complicated and nuanced (price should be a give-away, by the way, but sometimes it is not).

As for my client. Well she surprised me. After initially going for a fabulous on the waterfront apartment (view charming and pied dans l'eau but needing work), she changed overnight and decided on a higher up view that also took in a bit of Nice city. I share the same view and love it (it has a slightly Hollywood feel at night). In the end the apartment and view had to work in tandem - and this one does perfectly.

So next time you see a place advertised with 'magnificent sea views', remember it is not always that simple on the Côte d'Azur. For property assistance on the Côte d'Azur, contact us at www.coteabode.com