Prime property market in France seeing strong demand
Improving market sentiment in France is translating into stronger demand for luxury property with Paris leading the way in terms of sales and price growth which is now expanding into regional markets, according to a new analysis.
Provence and the French Riviera, then Gascony and the French Alps have all seen growth with the Eurostar line to Avignon, which has put London within a 6.5 hour train ride of Provence being a particular influence.
The report from international real estate advisors Knight Frank also says that enquiries for French homes increased by 33% and sales by 63% in 2018 year on year, based on its own data.
This momentum and positivity has continued in 2019, with a number of record prices set in
Paris and on the French Riviera in the first half of the year.
But the most expensive property is Saint Jean Cap Ferrat at €35,000 per square meter in the second quarter of 2019, followed by €28,000 on Saint Tropez, €26,000 in Courchevel 1850, €25,000 in Cap d’Antibes, and €20,000 in Cannes and Cap d’Ail.
A of Alpine resort have high values, including Val d’Isere at €19,500, Courchevel 1650 at €15,800, Meribel at €15,500, Megeve at €13,700, and Chamonix at €11,500, while Paris comes in at €19,000, Nice at €11,000 and Aix en Provence at €6,300.
Whilst Brexit and the resulting weak pound has seen UK buyers diminish, the report reveals that Belgian, German and Scandinavian buyers have stepped in to fill the gap. ‘With no currency fluctuations to consider and with Paris and Provence within a four hour drive for some, a second home for such buyers becomes a viable weekend retreat not just a summer getaway,’ the report says.
This issue of accessibility is a prerequisite for most buyers, it points out. As well as Eurostar, new large scale infrastructure projects in the form of the Grand Paris Project which is Europe’s biggest development opportunity over the next 10 years, the upgrading of Marseille Airport and the planned construction of several new high speed train lines may also influence demand and future market performance.
Around 70% of Knight Frank’s second home buyers in France aim to rent their property, a marked shift from a decade ago. The report says that buyers are becoming more financially savvy opting to rent their holiday home to help cover costs, but most do so without the expectation of a high yielding investment.
Saint Jean Cap Ferrat is described as the hotspot of the moment. The peninsula has around
500 spacious villas on large plots and it has one of the strongest international buyer profiles on the French Riviera.
The Eastern side, with the best beaches, the Port and the old town, offers the widest array of amenities, whilst the west has a steeper coastline and good views and it is easily accessible, within a 35 minute drive of Nice Airport and a 30 minute drive of Monaco. Prices range from €2 million to in excess of €200 million with the most active price band currently between €5 million and €10 million.
Prices across the eight alpine resorts covered by Knight Frank increased by 1.9% in the year to June 2019, up from 1.5% a year earlier. Prices have stabilised since 2013 and sales have been steady.
The report points out that sentiment improved in 2018/2019 in part due to the high snowfall witnessed in the previous season. The number of new build projects has declined as planning laws have become more draconian and this has pushed demand back towards the resales sector. Indeed, total volumes of sales in the Haute Savoie department increased 7.2% in the year to July 2019 according to the CGEDD.
Prime prices in Paris increased by 5% in the year to the second quarter of 2019 and stand 21% above their low of the fourth quarter of 2015. The report says that international demand is strengthening amongst European, US and Middle Eastern buyers in particular. A US buyer is currently able to secure a discount of nearly 14% in Paris compared to 2011 taking price changes and currency into account.
Areas to watch include South Pigalle, once part of Paris’ red light district, which has broken free of its seedy past and evolved into one of the city’s hippest neighbourhoods. Sandwiched between the desirable 9th and 18th arrondissements and at the foot of Montmartre Hill the area is home to independent boutiques, traditional bistros and upmarket cocktail bars.
Also up and coming is the 13th arrondissement, home to Station F, at 34,000 square metres the largest start-up facility in the world and the brainchild of tech billionaire Xavier Niel. Known as the 13th or Gobelins, it is one of the few neighbourhoods in Paris with two storey houses rather than just apartments. The 13th offers values closer to €8,000 per square metre rather than €11,000 in the 5th arrondissement.