France – a safe option for property buyers today
There were few markets spared in the economic downturn, France included, however, focus has now switched to the property markets which are recovering the quickest, and which markets offer a safe investment option. With news of France officially lifted from the recession, property agency, Agence 107 Promenade based in the ever popular Nice, in the south of France, talks about the recession and what there is to come for this region.
Kirkor Ajderhanyan, MD and owner of Agence 107 Promenade:
During the beginning of the economic recession, towards the end of 2008, when we started to notice the effects, we saw the real estate market stall, in every sector. The largest effect of this was the lack of confidence in the property market and the uncertainty of what the future holds for property in France and in most cases, people were concerned about the recession in their home countries, coupled with fluctuating currencies, which of course has a huge knock on effect in the purchase of second homes overseas.
It was not until January or February of this year that wealthy buyers started to re-enter the property market, seeking out and buying apartments of which the owners were pressured to sell. This trend has continued into summer and the number of buyers in the market has increased significantly which has been shown in the growing number of property sales.
Inevitably, six months after the start of such a severe financial crisis actual selling prices did reduce, although comparatively moderately in Nice. This has lead to one of the hardest problems we face today, the gap between what sellers are prepared to sell their properties for and the perceived worth by the buyers, bridging this gap and easing sellers into the new market conditions can be very difficult. Everything is, however, relative and those selling at slightly lower prices than in 2007 are also able to purchase at the proportionate lower value, it is only those dropping out of the market altogether, people relocating back to their home countries or those retiring that it becomes more of an issue.
The situation in Nice for current property owners has been that offers are flooding in on properties but not necessarily at the price they were expecting. For the buyer, the market has opened up with people able to afford more than they would have done 1 or 2 years ago and so it is also an exciting time. The saying ‘location, location, location’ still rings true, properties in sought after locations such as the Promenade des Anglais, the seafront in Nice, are still in demand and even less effected by the downturn so the very micro or localized markets are behaving quite differently from even the French Riviera as a whole.
Property prices on the Promenade des Anglais in particular have remained stable, over all we expect to see an increase in property prices in Nice within the next 6 months. After all, France is a ‘safe’ choice for buyers today. It has one of the best consumer protection laws in place for any other European country; the French banks do not have as much toxic debt as other banks around the world thanks to stringent mortgage criteria. Plus for the UK especially, France has always been a popular destination for holidays and property buyers alike, with visitors flocking over the Channel for the beautiful landscapes, culture and appealing warm climate, well in the south of France anyhow!
Nice and the seafront in particular, offers a good investment for a range of budgets. It’s location on the 7km stretch of coast is quite exceptional and it has a large variety of properties and prices with opportunities for resale profits in the medium-term. The City of Nice and the Urban Community are also implementing a range of urban improvement policies including the second tramway line, stretching from the East to West of the coastline taking in the administrative business centre of Nice as well as the International Airport. This will ease traffic and any associated pollution along the Promenade enhancing the atmosphere and experience further for visitors.
In the forthcoming months we expect that our local market, the French Riviera, will initially show price increases and more property movement in the higher segments of the market. Wealthy people are looking to invest in properties offering them security and stable growth. And with the constant threat of bankruptcy and negligible bank interest rates, real estate offers a tangible alternative.
For the lower and middle segments of the market, we do not feel that prices will fall any further than the 10% or so already experienced and so stability and increases are set to happen. As always the well presented properties in good locations attract more interest with buyers.
For more information on the French Riviera or to enquire about your French property requirements contact Agence 107 Promenade on 00 33 4 93 44 83 83 or visit www.107promende.com
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Kirkor is President of the International Relations Committee FNAIM, French Real Estate Federation French Riviera. He’s a member of NAR National Association of Realtors, a member of the Board for the French Chapter of FIABCI France Vice-President Exchange Committee FIABCI International. Regional Representative FIABCI France French Riviera. Member of the Board of French Riviera & Regional Committee FNAIM. CIPS/TRC.
On the market:
Ref. 867 Promenade des Anglais:
An incredibly spacious 1 bedroom apartment in a Bourgeoisie style building on the prestigious Promenade des Anglais, Nice. The property has a large terrace, kitchen, dining room, living room, bathroom and WC.