Prime prices in the Côte d’Azur are on a high plateau. After a few years of low transactions, the market is now adjusting to a changing buyer demands, a new tax environment and growing global competition.
Supply remains high, but France’s enhanced international standing and demand for euro-denominated assets are fuelling interest in the region’s real estate.
The region offers a desirable lifestyle but also the benefits of city living with high-end retail, restaurants and a full social calendar. This makes it appealing to a new wave of young, globally mobile, high net worth individuals looking for high specification homes that are ready to move into.
Although French buyers are present at the lower tiers of the prime market, accounting for around half of transactions between €2 and €5 million, above €10million, buyers are almost always international. Russians and Eastern Europeans are returning to the market, but with lower budgets, and are increasingly present in the rentals market. Belgians and Scandinavians are new to the market and are fast-growing. British buyers are still present and those from the Middle East remain a force.
The prime Côte d’Azur residential market peaked in 2008, having risen much faster than the rest of France. Activity slowed significantly after the Global Financial Crisis however there were few forced sales. Transactions levels decreased but values remained stable. In common with other prime markets such as London and New York prices, the Côte d’Azur did pick up in 2011, driven by new wealth from emerging markets, most notably from Russia and the Middle East. Demand began to slow after 2012 with the election of Francois Hollande, and after 2014, fell again due to falling commodity prices and the stalling French economy.
The 2017 election of Emmanuel Macron has marked a turning point. Thanks to an improved national economy, demand is returning to the Côte d’Azur. However, stock levels are high, meaning it is a buyer’s market.
Purchasers are seeking the best in class properties and are negotiating hard with transaction prices for prime resale properties typically discounted between 10 per cent and 30 per cent on asking price.
Although transaction data for the $10 million market shows a fall of 40 per cent in the average sales price since 2011, this is mainly due to some exceptionally high values sales in 2011. Average pries per square metre have remained broadly static and are close to the levels seen in 2006.