Pricing: Determining a Villa’s Market Value

    Contrary to what many would assume, the French Riviera is a tricky place to make money on real estate.

    The French government is actively trying to make real estate more affordable by adding cumbersome taxes for second homes and thinking up ways to disincentivize house-flipping, investment purchases, AirBnb rentals, and vacation homes. You can 100% expect more of this in the future.

    Given these efforts and a range of other factors, the French Riviera is not a good place to buy real estate for an investment. Prices have been flat-lined for more than a decade and are on a downward trajectory, so don’t expect to make money (in fact, count on losing money) when you buy on the Côte d’Azur.

    How to Estimate the Villa’s Market Value

    The first thing you’ll need to determine is what the historic pricing trends (based on actual sale prices) in the town you want to buy in are, and what the pricing will be in the future. Here are our expert French Riviera real estate pricing predictions, and all the factors that will affect pricing in the near future. Make sure to read them!

    Always remember: The agent, the notary, and any contractor who works with either of them, all have one goal: to sell you a villa at the highest price possible, as fast as possible. This is how they get paid the most, with the least work. For this reason, it's very important that you don't trust their pricing advice.

    Pricing: Determining a Villa's Market Value - real estate projections france 2020 2021
    Pricing: Determining a Villa's Market Value - real estate projections france 2021
    Estimates from the JDN website

    Here’s How to Check What the Property is Really Worth

    The easiest way to get an estimate of the true current value (and the recent sales prices) in a specific area of the French Riviera is on the websites listed below. Keep in mind the time period that the estimation is based on, as data that includes 2019 and early 2020 will skew higher than post-Covid19 pricing from mid-2020 to current.

    • Accurate website for price estimating: The best way to estimate the value of a property is to check this notaire statistics website and this one (both will give the same pricing). This is where the French government publishes ALL residential real estate sale prices, purchased by anyone (SCI’s and corporate purchasers included). On the notaire website you can learn the high, low and average sale prices per area, per time period. You can select a time period for the price estimation, and see which towns / areas are more or less expensive, how many sales there have been in that time period, and compare the average pricing of different time periods to get an idea of if the market is going up or down. It also lets you specify new or resale house or apartment, the property size, and the area or town.
    • Accurate website for past sales prices: This government website has an interactive map of France which allows you to click on the area of ​​your choice to see the prices of past sales. Another, similar, government website, Immo Notaires, allows you to enter a specific address or click on a map to find past sales prices (within the last 5 years). This notaire website shows you the list of recent sales by town.
    • Historic pricing per town: The JDN website and the Drimki website both show trends of real estate prices per town or area over time, including the high and low price per m2. These sites show lower prices than the notaires website, but it gives you an idea of the demand over time. It also shows interesting information about the types of housing and who lives in them.
    Pricing: Determining a Villa's Market Value - france real estate buying guide
    Pricing: Determining a Villa's Market Value - france real estate buying guide tips 1
    example of SeLoger price estimation results
    • Specific estimations: On the SeLoger website you can also put in the villa details and get a price estimation specific to that property. They supposedly take into account everything from the street, the view, details about the villa, amenities and land, etc. then give you the highest (if it’s newly renovated with high-quality materials), expected (average renovation and condition), and lowest price (needs renovations) that they estimate the property is worth.
    • Biased with false historical prices: Your agent might tell you to look at SeLoger to find the average m2 of the town. When compared with the local m2 sale prices released by the notaires, SeLoger slants much higher than the real sales prices (which, not surprisingly, benefits real estate agents), as their estimations are based on selectively-picked 3+ year-old sales data.
    • Completely inaccurate and deceptive: MeilleursAgents‘ estimates of selling prices are completely inaccurate. They are typically more than double what the notaires data dictates. They are completely opaque and don’t disclose how they arrive at those estimations.
    Pricing: Determining a Villa's Market Value - french riviera real estate predictions
    the official notaire website will give you 100% accurate pricing

    Why There’s So Much Extreme Overpricing

    “This is a good price and we’ve had a lot of interest. At this price, this villa will sell very quickly. You have to decide right away!”, real estate agents often say (here’s a list of more dishonest things that real estate agents might tell you), hoping to rush you into buying an overpriced villa. However, it is not uncommon for the buyer to realize that this was just a high-pressure sales tactic and that the villa is still for sale months (or even years) later, usually because it’s extremely overpriced.

    Similarly, some real estate agencies tell sellers that they can sell their property for much more than it's actually worth just to secure the listing for their agency. Owners tend to list with the agent that says they can get the most money for them. This is why many villas are listed for sale at two or three times what they are worth. Many agents also greatly inflate the m2 in the listing, to justify the price. Then the villa simply sits on the market for years until the seller lowers the price, often several times.

    Essential Tip: On the notaire’s website you can learn the high, low, and average m2 price that villas have actually been selling for.

    Another phenomenon specific to the French Riviera real estate market is wealthy owners listing villas they own at prices that are many times higher that they are worth, on the off-chance that a wealthy person from Monaco (who has not done their research, or does not care about the price) will make a mistake and buy it, so they can then use that money to buy 2 or 3 similar villas with that money. These owners often own multiple villas which they use for income generation (they rent them out for the summer season), and these owners don’t really care if they sell. However, most Monaco residents are savvy and price-conscious. Where you do occasionally see an overpriced villa selling, is with the largest modern villas (but only new modern villas) with exceptional views, in Cap Ferrat and certain areas close to Monaco, which mostly sell to Russians who are not price-conscious.

    The good news is that the French government is actively trying to disincentivize this sort of investment purchasing, in an attempt to make real estate more affordable. This year they added new and cumbersome taxes for second homes and are actively thinking up other ways to disincentivize house-flipping, investment purchases, AirBnb rentals, and vacation homes. You can 100% expect more of this in the future.

    Find Your Offer Price: Step-by-Step Instructions

    In summary, to calculate the market value of a villa (which is what you should offer), you need to:

    1. Find out the ‘habitable’ m2 area of the main house (don’t go based on the listing) by looking at the diagnostic report.
    2. Find out the range of past sale prices per m2 range for the area you’re looking at (by using the websites listed above).

    That will give you a ballpark price range. Then, to find out where in that range this villa fits, you look at these factors, which either put it higher or lower in the range:

    1. Figure out if the villa is in a more or less expensive part of that area. For example, areas closer to the water are usually much more valuable.
    2. How is the view? Could it get blocked in the future? A fantastic, unobstructed sea view increases the value. Seeing neighbors or other villas in the view lowers it. This is less true in areas where most of the villas have a great view, like Eze.
    3. Is the style of the villa modern or an older style? Modern villas sell for considerably more per m2 (and have many, many more buyers who want them — including Russian buyers, who will sometimes pay above market value) than traditional or outdated-looking styles.
    4. When was the villa built? Newer villas sell for more money and require less repairs. Older villas likely need updated electrical, plumbing, roof, and other work, so take that into account.
    5. Then check if there’s other factors that would lower the price, such as a train within earshot, or ugly power lines, or road noise which would lower the value.
    6. Then factor in if it needs renovations. If it doesn’t, that makes it more valuable, but if it does, that pushes it down in value quite a bit.
    7. If the land is buildable, so you could expand the house, that would add a small amount of value, but if not, it would remove value. If it’s in a red zone, the price should drop about 20%.
    8. Factor in how much land is included and the quality of the gardens, pool, garage, etc.

    Another part of determining what a villa will sell for is finding out how long it’s been on the market. Since agents likely won’t tell you the truth (or they’ll just tell you how long they’ve had the listing), the best option is to get the diagnostics reports and the mandat (the agreement to list) from the agent, and look at the date on them. Then you’ll know that it’s been for sale for at least that long. (BUT since diagnostics reports are only valid for three years, if the villa has been on the market for more than three years, the diagnostics might have recently been re-done and show a more recent date.) If it's been on the market for more than a few months, there's a reason: either the price is much, much too high, or there are serious issues with the property. The longer it’s been on the market, the lower your offer should be.

    That will tell you where in the price range to value it. You may also want to take into account the trajectory of the market (here’s how to tell if prices are rising or falling). This will give you a price that you can justify in a letter to the seller.

    If the seller accepts, then you can get surveys done to see if the m2 is accurate, if the villa needs electrical or plumbing upgrades, etc. and based on that you can further adjust the price before putting the offer in a legal contract with the notaire (whom you should have selected in advance).

    Buying a villa? Make sure to read all of our guides!

    Our guide to where the market is headed includes: French Riviera real estate market predictions, current & historic pricing trends in the market, and why prices will continue to fall.

    Our guide to real estate listings includes: how to find villas for sale, what to look out for, misinformation and warnings, auctions & foreclosures, buying direct from sellers, why timing is everything, and the reason why only about half of villa sales are publicly listed.

    Our guide to real estate agents includes: who to trust (a warning), things agents tell you, how real estate agencies operate, and why you should avoid illegal and non-local agents.

    Our guide to pricing & determining a villa’s market value includes: why there’s so much extreme overpricing, how to estimate a villa’s market value (what it’s worth), and a step-by-step guide to finding your offer price.

    Our guide to important things to find out includes: diagnostic reports and surveys, sun & micro-climates, potential issues with the view, housing taxes, the age, internet and mobile access, danger (red) zones, health risks, privacy & space issues, nearby problems, what you’ll actually own, illegal additions and structures, why they’re selling, how to verify, and more.

    Our guide to things to consider includes: your actual costs, learning about local crime & squatters, and questions to ask yourself.

    Our guide to the buying process includes: negotiating the price & the initial offer, choosing an honest notaire, buying in the black, the official offer & deposit, using a SCI, the deposit, the cooling-off period, what to do before handing over the money, and the final signing.

    Our guide for after you buy includes: insurance pitfalls, tips for second homes, renting your villa, renovating, and what to know about hiring people.

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