At the start of 2020, the French property market had been flying, with demand for prestige property leading the way.
Sales were at record numbers, whether for a country estate in south west France, an apartment in prime central Paris or a luxury villa in the Alps or PACA (Provence-Alpes-Côte d’Azur).
A report by Knight Frank’s research team, entitled “For the world’s wealthy, France remains the ultimate home from home’, went on to forecast even stronger growth for luxury property.
Then, in mid-March, the country went into lockdown – like so many others around the world – and sales ground to a halt. Significantly, though, online interest jumped dramatically.
The Leggett Prestige website saw visitor numbers soar and its sales support team started building a database of high-end buyers who were keen to visit as soon as lockdown finished.
“Confinement was lifted by mid-May and the offers came flooding in immediately – July and August were record years for our agency with demand driven by domestic buyers and topped up by those from the UK, keen to move before Brexit,” the firm said.
Leggett is not alone. Agencies across the country have reported a jump in sales at the top end of the market, with the Axel Springer Group (owner of a portfolio of leading French portals) predicting that overall there will be 918,000 sales across France in 2020, a ‘remarkable number’ considering the estimated 180,000 sales lost during lockdown.
Estimates suggest that there are well over 600,000 millionaires in France, with this number forecast to grow by 22% in the next five years. President Macron’s commitment to inward investment means that France is also welcoming overseas buyers, keen on benefiting from a revised wealth tax regime. According to Leggett, the future of the high-end property market appears rosy.
“The only clouds on what seems to be an incredibly sunny horizon are a tightening of lending criteria being introduced by increasingly nervous banks and the forecast that unemployment could well rise to 12% by 2021,” it added. “Neither of these particularly affect the HNWI’s buying prestige property in France, though. Any impact would be on the bottom and mid-markets.”
The regional picture
Leggett says the prime real estate market in Paris was scorching hot in 2018 and 2019, with 6% growth last year, rising to 10% in popular arrondissements like the 10th. Despite this, the agency argues that the city still offers excellent value when seen from a global perspective – for instance, prices are 66% lower than in Hong Kong.
The ‘Grand Paris’ infrastructure project means that demand remains strong from both domestic and international buyers.
“Around 84% of all sales are to French buyers but this figure decreases at the very top end where overseas buyers see a property in Paris as a ‘must-have’ addition to their global portfolio,” the company said.
According to the agency, the Alps have a lower volume of new build stock coming to the market than in previous years, which is likely to cushion any negative effects of the Covid-19 pandemic.
“Certainly, Leggett is seeing strong demand and difficulty in finding quality stock in some resorts. The nature of a ski resort is that it attracts nationalities from all over the world, with packed bars, restaurants and slopes – in the short-term visitor numbers will obviously be restricted, but this will be temporary and is bound to offer excellent buying opportunities,” a spokesperson for the firm continued.
“Indeed, Leggett has had a constant stream of buyers offering on the back of videos, virtual tours and floor plans and purchasing ‘sight unseen’.”
During lockdown, Leggett saw requests for information on properties in PACA soar and this was echoed by a report from the high-end Belles Demeures portal where only Paris saw greater search volume.
Its office in Nice confirms this and says that viewings now are constant. Agents there report that two of the main hotspots for prime properties are Le Port and the Liberation district.
“We expect that prime property, both in and out of town, will achieve premium prices over the coming months,” Leggett concluded.
The Leggett Prestige Collection contains more than 600 properties, ranging from historic family châteaux, country estates and elegant villas on the Côte d’Azur to quality vineyards and equestrian estates of all sizes. Leggett is also well known for its portfolio of Alpine ski properties in a wide range of top resorts.
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What are the current rules on travelling to France?
Despite being only touching distance away, there are a number of restrictions when travelling to and from our nearest Continental neighbour.
The Foreign Office currently advises against all but essential travel to France (including Corsica), based on the current assessment of Covid-19 risks.
There has been a sharp increase in cases in France in recent weeks and, from August 15, those returning to the UK from France have been required to self-isolate for two weeks upon their return, unless exempt. You can go here to check the latest guidance for England, Northern Ireland, Scotland and Wales. The guidance includes information on the rules if you’re transiting through France from another country to reach the UK.
Travellers arriving in France from the UK are no longer required to self-isolate, or to demonstrate their travel is essential. Arrivals by sea and air routes will, though, need to complete a ‘sworn statement’ (déclaration sur l’honneur) form self-certifying they are not suffering from symptoms associated with Covid-19 and have not been in contact with confirmed cases in the preceding fortnight. This is available in English on the site of the French Embassy London.
France is comfortably the most visited country by British nationals each year, with around 17 million people enjoying what the country has to offer on an annual basis. Most visits are trouble-free, although pickpocketing may be an issue.
<!– –> This post has originally been featured in Property Investor Today.