French Riviera poised to benefit from demand from global wealthy buyers

Taylor Scott International News

Prime property prices in the world’s most expensive cities are cooling which means that wealthy property investors could look increasingly to other cities and leisure hotspots such as the French Riviera, new research suggests. While in France as a whole property prices and sales in the last three years have fallen the Riviera is still a magnet for wealthy buyers. Indeed, the area that stretches from St Tropez in the south west to the border of Italy is the third richest region in France. While prices in France overall were down 8.1% as of December 2014 compared their peak in the third quarter of 2011, the Provence-Alpes-Côte d'Azur (PACA) region consistently commands the country’s highest house prices and the second highest apartment prices behind the Paris region. The latest French Riviera residential market report from international real estate firm Savills also points out that it is an important global tourist market where some 17% of properties are second homes or occasional accommodation, compared to 11% nationally. The analysis points out that like the rest of France, prices have fallen in PACA and the market is a buyers’ one. Values in the region have tracked the national average closely, and are down 9.5% from a 2011 high. ‘The market did not see the same rally between 2009 and 2011 as that experienced in Paris, so values currently look better value than those in the French capital,’ the report says, adding that government rhetoric and negative media coverage around the taxation of wealth, coupled with a faltering domestic economy has slowed activity across the Riviera's prime markets. The number of €3 million plus deals fell by 44% across the region between 2007 and 2013. Cap Ferrat and St Tropez, home to the Riviera’s largest prime markets, saw the sharpest declines, down 69% and 54% respectively. ‘Although transaction numbers are down, purchasers of the region’s best properties tend to hold for long periods, with low gearing as these homes are viewed as a store of wealth, so forced sales are rare and, as a consequence, there is no mechanism for prices to fall substantially,’ the report explains. It also points out that property in the French Riviera for most is viewed as an asset with long term appeal and therefore a safe store of wealth and regional statistics disguise local market characteristics. ‘What sets the French Riviera apart is extremely limited supply in the most desirable spots. In Saint-Jean-Cap-Ferrat, a peninsula of land east of Nice, there are around 500 properties and only a handful come onto the market in any single year. Supply is kept low and prices high by wealthy buyers who hold for long periods and are not generally forced to sell,’ the report says. ‘Cap-d’Ail, Beausoleil, Roquebrune-Cap-Martin adjoin Monaco and have benefited from the surge in activity that the Principality’s residential markets have experienced. Significantly cheaper prime property is available here, albeit without the tax benefits. The area has proved popular with… Continue reading →

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