Southern France – a safe haven for investment

The housing market on the French Riviera with places like Antibes, Nice, Juan Les Pins, Cannes, Mougins and Valbonne, has traditionally been characterized by stability and an average double digit rise in property value during the last 7 years. But even this market is not completely unaffected by what happens in the rest of the world, and late autumn 2008 saw a decrease in sales for both new and older properties alike. But prices still remained good, and statistics for December 2008, showed the ever popular Cannes to only have a price fall of 1%.

By Nils Bjørnæs

"Why is it that prices have decreased less in the Riviera than elsewhere?

"There are not enough housing being built, which provides a good balance in the market in contrast to for example Spain, where there has been too much construction, "says Tom Greni, Managing director of Nordvik & Partners Real Estate France.

Côte d'Azur, or the French Riviera as we know it, is the stretch of coast from Menton near the border to Italy, to Cassis in the west. The Riviera was one of the first modern resorts and began as a winter resort for ailing British tourists who traveled there for health reasons. With the arrival of the railway it quickly became the in-place to go on vacation for the British and Russian Aristocracy. It wasn't until after World War II that it became a popular destination for mass tourism and particularly as a summer residence and meeting place for film stars and other celebrities.

High prices
There are several reasons why house prices are so high on the French Riviera. First of all it is a very sought after area because of its climate, high glamour and celebrity factor, beautiful beaches, exclusive shops, top restaurants, festivals and lots of entertainment.
Secondly there is a limited area to build on, which is pushing prices up according to the rule of supply and demand. And demand has always been greater than the supply on the Riviera.

"A centrally located apartment on French Riviera may be a big investment, but it is precisely because it is so attractive and that there is a shortage of apartments. Here there are very short distances so if you go a little further in from the coast, prices are significantly lower. You still will not have more than 20-30 minutes to the beach, "says Tom Greni.

What do you sell most, villas or apartments?

"We sell mainly apartments but also a number of villas. Most people want to have it as holiday home, and spend part of the year here. We are also seeing more and more people who want to settle down, some of them sell their home and move permanently. The advantage is that communication to Norway is simple and fast, so that family and friends can come for visits.

Do you sell to other nationalities than the Norwegians?

"We sell most to our own nationals, but also to people from Sweden, Denmark, Belgium, Holland, England and Ireland."

What type of property are most people looking for?

"The majority want an apartment with 2 bedrooms, 2 bathrooms, terrace, and swimming pool and preferably with a view."

How is the market now?

"After a bit of a slow autumn and winter we are now seeing a return in people who are looking to invest. Interest rates are low and the market is stable. Buying property will always be a good long term investment. In recent weeks we have seen, for example, that the Italians have picked up the pace and come down here. As an example I can mention a project that we have in Cannes, where 25% were sold within the three first weeks."

How are the building standards?

"Building standards are very good, and at the same time, you have good guaranties on new apartments, including a 10 year building guarantee."

Do you also have vacation homes for rent?

"No we don't deal with that, but for clients who buy from us and want to rent their property out, we provide them with contacts. Many people choose to rent their holiday home out for longer or shorter periods of the year."

So what advice would you give to people who consider buying a holiday home on the Riviera?

"This is a good time to invest. The market has been slower, which means that there are some very good houses up for grabs. These are homes that would have been difficult to obtain in the past when they sold extremely quickly and almost with waiting list. It means that those who are looking to invest this spring and summer can get a good property at a reasonable price.

"Many people feel that an investment on the French Riviera is one of the best investments you can make, and in fact a better option than many other forms of saving. I know where I would put my money. Quality of life is becoming more and more important and you will find that on the French Riviera".

Some info on the French Riviera.

The total population is approximately 4.5 million (Provence).

Nice is the fifth largest city in France and Nice airport is the second largest.

Sophia Antipolis (Antibes) is France's answer to Silicon Valley.

There are over 17 million tourists who come here each year.
Of these, 57% are foreigners.

There are approximately 68 million overnight stays every year.

Foreign nationals can buy property in France and the system for purchase is seen to be much better than most countries when it comes to taking care of the buyer's rights.

It is important that the purchase of property is conducted through brokers who have a French real-estate license.

Since the rental market is very strong, some sellers are choosing to rent their homes out while waiting for the market to pick up again.
On long-term rental, you can expect approx. 3% return on invested capital.
On short-term rentals you will cover your capital expenditures with approx. 22 weeks of rental.

In a stormy ocean people are happy to find a safe haven for their investments.

By buying in France, you have the ability to finance up to 80% of the purchase price with security in the property. Interest rates can be deducted from the tax return in Norway.

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