Market comment - France

25 February 2010

Paul Humphreys, head of Knight Frank’s French department, commented:

Cote D’Azur and Provence

“In the core Cote D’Azur market prices have corrected and we foresee stability for the coming period. Despite lower levels of interest at the start of 2009, including less UK buyers for the South of France (less than 50% of total registrations), the second half of the year witnessed increased activity (20-30%) by a coalition of Dutch, Norwegian, Danish, Belgian and Russian purchasers. Noticeably, since the start of 2010 there has been a return to the market by UK based purchasers (73% of total registrations) looking to pursue their lifestyle requirements in the South of France, assisted by low interest rates and lower capital values.
“At the top end, the market remains untested as transactions are sparse. There is adequate supply but confidence remains somewhat passive and buyers are content to wait. There is a sense that when the first few sales have happened others will follow. Whereas during the spring and early summer the evidence of an increase in supply was for the first time in years starting to emerge, within the subsequent months this has reversed and now, depending on the price point, supply is slightly lacking.
“Inland, Provence saw the re-emergence of British buyers earlier than the Cote D’Azur. Other nationalities also maintain a real love for Provence with Americans, Australians and French (Paris) buyers also competing for the best villas. Supply is steady so prices are static, but we anticipate a stable season with reasonable sale volumes. “
Our top recommendations for 2010
“Whilst the whole of the Cote D'Azur attracts international demand, the most robust financially has been the St Tropez end of the coast. A planning law passed approximately three years ago stating that no new planning consents are permitted for construction within 300m of the sea, has significantly restricted new supply. If a buyer’s choice is the St Tropez end of the coast, with its many vineyards, rolling wooded hills, world renowned beaches and international chic of the port itself, then the financial argument may now also support the lifestyle choice as well.”
“Market sentiment is anticipating demand overall to increase assisted by changes to the UK tax regime. Prices generally in Monaco remain affected by the global market conditions, although whereas before Christmas sales volume was very low it has now steadied and a more normal market is emerging. Prime asking prices headline at approximately €50,000/sq m, which is at the same level as two years ago.”
South West France
“From the end of 2007 price reductions in order to achieve sales have been evidenced. Like the rest of France the South West of France[1] has not been immune from global market conditions.
“Many British sellers have been able to reduce their asking prices to competitive levels through their ability to repatriate Euros into Sterling, with their sales price reduction being offset by the currency exchange rate benefits.
“There is still a lot of stock on the market but this is divided into two parts. Firstly, the section of the market which includes good quality and correctly priced properties - these can take up to 18 months to sell and are the targets of interest for the majority of property enquiries.
“Secondly, properties that are being marketed at inflated prices evidenced usually by less motivated vendors giving the impression of a property market with a level of supply that is too high.
“If you discount the second group of properties, there is a limited supply of quality period homes in SW France and, as the numbers of buyers increases, this is likely to have the effect of keeping prices stable in the coming period.”
Our top recommendations for 2010
“Whilst previous years have provided opportunities to buy in less well known areas of South West France (for example Lot-et-Garonne), with the adjustment in prices it is now possible to find a “core market” property at a competitive level (compared to 2006/2007) in areas such as the Dordogne and parts of Gascony.
“Confidence in the area is further confirmed by there being no sign of the discounted airlines withdrawing and is further supplemented by visible investment in local infrastructure – as demonstrated by the substantial upgrading of Bergerac airport.”
“There are a number of separate markets in the Alps. Generally the resorts where prices have adjusted (Chamonix and the lower villages of Courchevel for example) have seen renewed activity in their markets. Reductions in Chamonix have meant that (certainly for well located apartments) there has been renewed sales activity, especially at the 500k to 750k Euros level.
“Across the board there has been increased evidence of buyer demand in core areas (Courchevel, Meribel, Megeve, Chamonix and Val d'Isere) with high budget purchasers (10m Euros +) appearing at the end of 2009 and being joined in January 2010 by those looking in the 500k to 1.5m mark.
“Asking prices in prime alpine locations have been generally stable as many vendors have been capable of retaining their properties during the last two years. Sales activity in these prime areas (Courchevel 1850 and Les Carats in Val d'Isere for example) has been limited and whilst viewings are being seen at the 10m Euros+ levels we are yet to see these translate into many transactions and hence confirm this season’s price levels.
“Supply still remains very limited as local building regulations in the above locations are restricting the number of new developments that can be built. In some cases planning consent to redevelop older chalets has been granted, subject to strict planning guidelines.
“It is felt that for those areas where prices have reduced sales volumes will increase whilst demand for property in the prime locations (coupled with a limited supply of quality properties) will underpin price stability in these areas.”
Our top recommendations for 2010
“Either an apartment in Chamonix (where prices have now made a purchase much more affordable) or the ability to buy a small chalet in the Trois Vallees.  
The snow has again been good and despite the last two years in the financial world, the skiing season has been busy in 2008/09 and 2009/10 so far giving a good basis for both a lifestyle and investment purchase.”
For further information, please contact:
Paul Humphreys, partner, head of French team, Knight Frank, +44 (0)20 7861 1727,
Niki Riley, press office, Knight Frank, +44 (0)20 7861 5037,
Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 207 offices, in 43 countries, across six continents. More than 6,340 professionals handle in excess of US$886 billion (£594 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit

[1] For South West of France we mean the area roughly bordered by Angouleme at the most Northern level to Pau at the Southern end with the Eastern border being demarked by the Brive-Toulouse-Pyrenees motorway. The area covers approximately 40,000 km2 and includes 9 departments (Charente, Charente-Maritime, Gironde, Dordogne, Lot-et-Garonne, Gers, Pyrenees-Atlantiques, Tarn-et-Garonne)