- French housing market resilient through 2020
- Second homes a significant share of housing market portfolio in south of France
South of France Not Boom-and-Bust Property Market
According to Tim Swannie, director of Home Hunts, a firm specializing in luxury properties in France, Monaco, and Switzerland, said, “The south of France generally is not a boom-and-bust property market. Most owners see a gradual increase in their property value over time.”
Makes sense, right? After all, it is the south of France where the climate is mild, the architecture is historically rich and the food and wines are beyond delicious.
Region Reeks with Cultural Riches
Do any of these cultural offerings and/or activities sound interesting to you?
- The Cannes Film Festival
- The theater festival in Avignon
- The dance festivals in Montpellier
- The beaches and nightlife in St. Tropez
No wonder properties in the south of France have staying power.
The National Institute for Statistical and Economic Studies indicated that during Q4 2020, home prices in all of France increased +6.1%. Existing home prices grew +6.4% while new home prices rose +2.8%.
When pandemic 2020 arrived and the first national lockdown was lifted last May, Swannie said, “It was like a dam opening its gates – the market was inundated with buyers…” Buyers, not lookers. “Properties were being sold at the asking price, sometimes with several buyers bidding, or being sold before officially being put on the market.”
Foreign demand for a second home in France is currently described as being “…very, very high for a home in the country with double the number of new clients and new inquiries,” according to Laetitia Hodson, an associate partner with Knight Frank.
Since the beginning of 2021, Hodson said, “…transactions are much closer to the asking price…” and because some sellers are not listing, preferring instead to use their second home for themselves, inventory is low.
Site Specific Price Ranges
In Provence, a 3-4 bedroom village home with a small garden ranges from $780,000-$1.2M. Prices for a home with a garden and pool begin at $1.8M…for private estates, $36M. (All prices are converted from euros to dollars.)
In Occitanie, a small pied-a-terre is typically priced at $550,000 and an estate is typically priced at approximately $5.5M+.
Currently on the market, there is an 11thC knight’s tower on nearly 47 acres outside the medieval city of Uzes where vacation homes dominate southern France’s housing market. Marseille (with its international airport) and France’s Mediterranean coast are just 90 miles southeast from Uzes.
According to Swannie, most buyers are looking for “character” properties such as traditional Provencal stone-build farmhouses “…with thick walls and small windows on the south-facing side of the house.”
Those preferring larger properties, homes originally built for nobles called “Bastides,” will find more symmetrical rooms and sizes with larger windows and better views
Who is Buying?
Pre-pandemic, some 60% of buyers were international, primarily from the UK, the US and Sweden. Since the pandemic, some 60% of buyers are now domestic. Foreign buyers in 2021 are within driving distance to the south of France from Germany, Switzerland, Holland, Luxembourg and Belgium.
According to Amaury de Monclin, managing director and co-founder of Bluesky Finance, a French mortgage broker specializing in working with international buyers, international buyers are increasingly “present” in prime property in the range of $5-6M. De Monclin said, “American buyers comprise a significant share of the prime property market.”
Non-EU residents must spend 90 days out of every 180 days in France.
Sellers of French properties must arrange and pay for asbestos, energy, lead and termite inspections. (Of course, those costs are included in the transaction agreement.) If a pool is on the property, a safety features report is also required.
American buyers can borrow up to 80% of the purchase price for properties up to $840,000. Most mortgages require a minimum 30% down payment. Many US buyers prefer obtaining French mortgage loans, a process that typically takes 2-3 months, in order to get lower interest rates, taxes and foreign exchange benefits.
Thanks to The New York Times.
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