The property market in France’s Côte d’Azur is now adjusting to buyer demand, tax change and growing global competition but demand is returning, according to a new analysis.
The area is a desirable destination and location for foreign buyers and part of an international network of second home hotspots and because demand comes from a global marketplace, its prime residential markets have more in common with other top tier global city markets than the rest of France.
The analysis from international real estate firm Knight Franks also says that prime property prices in the Côte d’Azur are now on a high plateau having done so earlier than many other prime world markets and have seen fluctuations since.
Currently supply is high, but conditions are improving and the report suggests that France’s enhanced international standing, together with demand for euro-denominated assets, is fuelling interest in the region’s real estate.
‘The Mediterranean climate, vibrant towns, beautiful coastline and world-class events attract visitors from across the globe and create a spectacular setting for property. This underpins rental markets as well as creating demand for second homes and means the Côte d’Azur is likely to remain a desirable destination,’ said Paul Tostevin, a Knight Frank associate director.
He explained that while the Macron Government has brought stability and improved international standing, there has been no reprieve on property tax and in a buyer’s market discounts on asking prices range between 10% and 30%.
Looking at what is happening, the report reveals that those buying in the region are getting younger and they want to split their leisure time between multiple destinations in the Mediterranean so new build apartments with a high level of services are meeting this new demand for high quality and low maintenance.
It also points out that the economy of the Côte d’Azur is one of France’s most dynamic. The tourism market contributes up to 18% of the region’s GDP and is the country’s second biggest after Paris. Half of all visitors are foreign and 27% come from outside Europe. Nice airport is the second largest in France, hosting more than 12 million passengers last year.
Tourism is not the only attraction of the region. The high quality of life on the Côte d’Azur is an important factor in attracting and retaining talented global workforces. Sophia Antipolis, north of Antibes, is an internationally renowned science and technology park employing 36,000 people.
To the north of Nice, the €2.5 billion Eco-Vallé’ project will incorporate a new international business district, research and development facilities, retail and residential, connected by new tram and train lines.
The prime Côte d’Azur residential market peaked in 2008, having risen much faster than the rest of France and activity slowed significantly after the Global Financial Crisis. However, with the market dominated by wealthy foreign owners there were few forced sales. But transaction levels decreased and lower values were rarely realised.
In common with other prime markets such as London and New York, asset prices in the Côte d’Azur did pick up in 2011, driven by new wealth from emerging markets, most notably Russia and the Middle East.
Demand began to slow after 2012 with the election of François Hollande and, after 2014, fell again due to falling commodity prices, sanctions on countries such as Russia and the stalling French economy.
The 2017 election of Emmanuel Macron seems to have marked another turning point and demand is returning to the Côte d’Azur, but prime stock levels are high, so it is a buyer’s market.
Although transaction data for the €10 million plus market shows a fall of 40% in the average sales price since 2011, the report suggests that this is mainly due to some exceptionally high value sales of big properties in 2011. Average prices per square metre have remained broadly static and are close to levels seen in 2006.
Source : Property wire