Where next to invest? We profile the world’s top property hotspots, detailing everything an investor needs to know.
6.1pc up year-on-year (May 2017, Notaires)
3.89pc average yield (Global Property Guide)
7.7pc rise in sales year-on-year (Feb 2017, Notaires)
Where is it?
The French Riviera is the part of southeastern France that graces the country’s Mediterranean coast. Effectively the unofficial name for Provence-Alpes-Côte d’Azur, the area is famous for its stunning scenery and equally stunning inhabitants, with the world’s A-list celebrities descending there not just for the Cannes Film Festival in May, but for the luxurious lifestyle available all year round. Resorts and cities such as Saint-Tropez, Nice, and Antibes are names that automatically conjure all the glamour and glitz available for second home owners and holidaymakers alike.
Who lives there?
The Riviera began life as a winter resort for Britain’s wealthy in the 18th century and that upper-class appeal has never faded, bringing in wealthy house-hunters from around the world, not just the UK. Historically, Russians have been a notable presence on the coast, along with a healthy number of Americans, while there are a lot of wealthy familes, French second home owners and younger high-fliers all soaking up the atmosphere. Whether it’s the international schools, the strong flight connections or the fancy reputation, from the region’s largest city of Nice to the exclusive community of Sain-Jean-Cap-Ferrat, anybody who’s anybody is on the Côte d’Azur.
Asking why one would invest in property on the French Riviera might seem like a trick question, but conditions for investors in Provence-Alpes-Côte d’Azur have rarely been so favourable. France’s property market has been in a period of stagnation for several years, with real estate only starting to show signs of recovery in the last 12 months. According to INSEE, prices rose 1.8 per cent in the fourth quarter of 2016 and are estimated to have climbed 6.1 per cent in the year to May 2017 by Notaires of France.
As a result, the potential for capital growth is as strong as ever, while prices still remain low enough to be considerably more affordable than the market at its peak. Indeed, national property sales hit a 10-year high in 2016, while February 2017 saw sales rise 7.7 per cent year-on-year, even surpassing the peak figure recorded in May 2006.
French property, though, is a regional game, with each area boasting its own buyer dynamics and price performance. While Paris led national growth in values, according to Notaires, the city, like many capitals around the world, is seeing its prime sector cool down. As a result, many wealthy buyers are turning to the coast instead, where prices are also on the up, but without a wider market cooldown, making for a better value proposition. The bonus of 300 days of sunshine a year, beautiful beaches and authentic natural areas are the icing on the cake.
Even in the Riviera, it is a buyers’ market, thanks to the unprecedented negative Euribor rate keeping mortgage costs down. Some banks will also offer 100 per cent finance for prime buyers willing to invest in other assets, which will help to mitigate any tax costs. Add in the weak euro for US buyers looking to purchase a secure, stable asset away from home soil and demand is strengthening at the start of 2017: in Q1, enquiries for property in PACA rose 45 per cent quarter-on-quarter on TheMoveChannel.com.
Where should buyers be investing? Like France overall, the region is home to a number of different local markets. Cap-Ferrat has limited supply, which continues to push up prices; Monaco’s adjoining neighbours have seen a rise in activity, thanks to their proximity to the sought-after playground of the rich and famous, albeit without the city-state’s tax benefits; St Tropez has large plots of land that encourage a spacious approach to redevelopment; Nice is a moderately priced city with many options available; and Cannes lives up to its reputation as the darling of the film world, with short-term lettings during the festival potentially generating a (brief) blockbuster income, and exhibitions such as MIPIM and yachting event Les Voiles d’Antibes throughout the year helping to maintain rental yields.
At the time of writing, France has just elected Emmanuel Macron as the country’s new President. His victory over Le Pen in the polls has boosted confidence in the country’s economy, pushing the euro to a six-month high at the start of 2017, and, while he has spoken of plans to review France’s Wealth Tax, mortgage affordability and capital growth should help offset any initial impact from rising costs.
Russian buyers have traditionally been big spenders on the Riviera, but Middle Eastern buyers are increasingly acquiring property in the area and US investors are notably taking advantage of the strong dollar and weak euro to buy property perceived as a safe haven during turbulent political and economic times. Areas such as St Tropez, on the other hand, are more popular with domestic buyers. In general, European buyers favour older properties, while American buyers prefer newer estates. With France’s mortgages at an all-time low, though, the profile of those buying on the Riviera is only set to become more diverse.
“The French Riviera is one of the most desirable places in the world. Who wouldn’t want to live there?”
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