More than a bolthole: The ongoing allure of the French Riviera
More than a bolthole:
The ongoing allure of the French Riviera
The French Riviera, or Côte d’Azur, is known for its sunshine, Mediterranean lifestyle, incredible food, and the glitz-and-glamour of the seaside resorts of Cannes and Saint Tropez. Venture inland and you’ll also find delightful towns, medieval villages, and the ski slopes of the Southern Alps.
For these reasons and more, it’s one of the most sought-after second home locations in the world but it’s not been immune to the impact of pandemic lockdowns. Travelling to these idyllic French Riviera hideaways has been unpredictable and complex, especially for foreign homeowners.
As a result, the Côte d’Azur property market has had its fair share of ups and downs in the last 18 months, both for buyers and sellers. The £26.6 million waterfront mansion of the late-actor Sean Connery paints a telling picture - perched on the rocks in the exclusive Cap de Nice neighbourhood, it saw its listing price slashed in half in early 2021 after failing to find a buyer1.
A super-prime place in the sun
Despite this, estate agents have seen French buyers and Monégasques take up the slack – with property prices overall in the Côte d’Azur managing a 1% uptick in 2020, according to Knight Frank2.
“It’s not easy to say if it’s a buyer’s or seller’s market right now,” says Edward de Mallet Morgan, a London-based partner at Knight Frank within the international super-prime sales team.
One thing’s for sure, the pandemic has transformed the way we live. After months of hunkering down, there’s been something of an urban exodus with people wanting a place by the sea to call home, with plenty of space.
‘We’re seeing lots of people looking to implement this dream,” says Nice-based Alex Balkin, Executive Director of Savills for the French Riviera and French Alps.
“They’ve got new values. They want to spend more time with their families. And they want a good experience. After the last year, they know time by definition is ephemeral. They want to savour the moment.”
With high-speed internet becoming more common, people are also realising they can do their jobs remotely. And if you’re only going to be needed in the office three days a week, the appeal of a super-prime Mediterranean base has understandably gone up.
Investing in luxury
Not surprisingly the pandemic-induced ‘race for space’ has seen demand for villas strengthen at the expense of apartments. Given 99% of properties in the principality are either flats or apartments3, the pandemic may have slightly tarnished its appeal. Nevertheless, its property market remains robust.
And Monaco isn’t standing still. A newly-renovated Larvotto beach has recently opened to the public. While next door, an ambitious €2 billion offshore extension project to reclaim 15 acres of land from the sea, known as the Mareterra project and scheduled to be complete in 2025, will add real estate to the Monaco skyline that could potentially go for double the current going rate. The project also boasts a huge array of green credentials.
“Barclays has a long-standing expertise of the local real estate market and we’re currently seeing a strong appetite to finance acquisitions in Monaco, as well as in the French Riviera – an example of which is Mareterra,” says Gérald Mathieu, Head of Barclays Private Bank for Europe and the Middle East, and Monaco CEO.
Younger buyers snap up plush properties
Estate agents are also reporting the emergence of younger buyers in the super-prime property market. The dominant purchasers are no longer in their 50s looking at early retirement. Instead, it’s 30 or 40 somethings with jobs and family commitments.
“A lot of these younger buyers are after ‘turnkey’ properties – ready to use and in a good location,” says Balkin. “They’re not necessarily after contemporary properties, but they all want comfortable, user-friendly open space inside.”
The hottest Côte d’Azur properties have historically tended to be beside the seaside. But it’s now inland hotspots where prices are rising fastest. It’s the lure of cheaper, larger homes with bigger gardens – with buyers heading from the bustle of the coast to the charm and beauty of places like Valbonne, Mougins and Grasse.
“A lot of this shift to house living has simply translated into an increase of those living in apartments in Monaco who are now also considering owning a villa on the French Riviera,” says de Mallet Morgan.
Yet, despite this shift into the Riviera’s hinterland, “the most coveted spots remain in the prime areas of Cannes, Cap d’Antibes, Saint-Jean-Cap-Ferrat, Villefranche, Saint-Tropez and the like, as well as specific areas adjacent to the HNWI playgrounds”, remarks Balkin.
How things could be different after COVID-19
As borders begin to open and foreign buyers return to France’s ‘Blue Coast’, will things return to ‘normal’ in the property market?
“Buyers on the Riviera, and indeed globally, seem keen to make decisions quickly to buy properties that they intend using a lot, rather than for occasional holidays,” says de Mallet Morgan.
And places like Monaco – long the residence-of-choice for high-net-worth individuals because of its attractive fiscal environment – are now being recognised as prime ‘work from home’ locations in this post-COVID world.
Investments can fall as well as rise in value. Your capital or the income generated from your investment may be at risk.
- Has been prepared by Barclays Private Bank and is provided for information purposes only
- Is not research nor a product of the Barclays Research department. Any views expressed in this communication may differ from those of the Barclays Research department
- All opinions and estimates are given as of the date of this communication and are subject to change. Barclays Private Bank is not obliged to inform recipients of this communication of any change to such opinions or estimates
- Is general in nature and does not take into account any specific investment objectives, financial situation or particular needs of any particular person
- Does not constitute an offer, an invitation or a recommendation to enter into any product or service and does not constitute investment advice, solicitation to buy or sell securities and/or a personal recommendation. Any entry into any product or service requires Barclays’ subsequent formal agreement which will be subject to internal approvals and execution of binding documents
- Is confidential and is for the benefit of the recipient. No part of it may be reproduced, distributed or transmitted without the prior written permission of Barclays Private Bank
- Has not been reviewed or approved by any regulatory authority.
Any past or simulated past performance including back-testing, modelling or scenario analysis, or future projections contained in this communication is no indication as to future performance. No representation is made as to the accuracy of the assumptions made in this communication, or completeness of, any modelling, scenario analysis or back-testing. The value of any investment may also fluctuate as a result of market changes.
Barclays is a full service bank. In the normal course of offering products and services, Barclays may act in several capacities and simultaneously, giving rise to potential conflicts of interest which may impact the performance of the products.
Where information in this communication has been obtained from third party sources, we believe those sources to be reliable but we do not guarantee the information’s accuracy and you should note that it may be incomplete or condensed.
Neither Barclays nor any of its directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this communication or its contents or reliance on the information contained herein, except to the extent this would be prohibited by law or regulation. Law or regulation in certain countries may restrict the manner of distribution of this communication and the availability of the products and services, and persons who come into possession of this publication are required to inform themselves of and observe such restrictions.
You have sole responsibility for the management of your tax and legal affairs including making any applicable filings and payments and complying with any applicable laws and regulations. We have not and will not provide you with tax or legal advice and recommend that you obtain independent tax and legal advice tailored to your individual circumstances.
THIS COMMUNICATION IS PROVIDED FOR INFORMATION PURPOSES ONLY AND IS SUBJECT TO CHANGE. IT IS INDICATIVE ONLY AND IS NOT BINDING.