Shortcuts

    French Riviera Real Estate Market Predictions & Trends

    Updated: May 5, 2022

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

    The French Riviera is not a good investment market. Pricing in France does not move quickly outside of Paris, and the villa market is on the decline due to compounding factors.

    French Riviera Real Estate Market Predictions & Trends - tips buying property france 1 1

    Buying as an Investment?

    The unfortunate truth is that the French Riviera is not a good place to buy real estate for an investment. Prices have been either flat-lined or decreasing (depending on the area) in the south of France for nearly 15 years and all signs point to prices decreasing in the future. Covid brought a temporary 1% uptick in prices in 2020, but prices will continue to fall now that Covid lock-downs have stopped.

    Additionally, the French government is actively trying to make real estate less expensive. They’ve recently added cumbersome taxes for second homes, vacation rental profits, and when you sell (up to 49%). They’re forcing banks to reduce the number of mortgages given. And they’re 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.

    Because of newly-wealthy Russian buyers, the prices of luxury coastal real estate on the French Riviera shot straight upwards from the mid-90s until 2008. Since 2008, Russian sanctions have halted their buying craze and the prices have been flat. If you were lucky enough to sell property during that sliver of upwards pricing, you did well, but if you bought post-2008, you will likely have lost money, as real estate prices haven’t kept up with inflation. Many would argue that since the Russian’s artificially inflated prices, now that they will be leaving, that prices should deflate.

    If you’re looking to invest in real estate, you’re better off buying in Monaco, where the median price has increased by 82% in the last decade.

    Interesting fact: Nearly 30% of villas on the French Riviera are classified as ‘second homes’ (many of which are rented as vacation homes for the summer season), and nearly 8% are “unoccupied” (most of those are used exclusively for vacation rentals). Only 62% are primary residences!

    That said, this area is unlike any other on Earth, and if you love the French lifestyle and want to purchase a villa knowing these facts, then there’s a lot to learn before you sign the deed. First, we’ll explain the pricing trends for villas on the French Riviera, then you can continue on to our other France real estate buying guides, listed at the bottom.

    Three Markets in One

    It’s important to understand that the French Riviera is three markets in one: private, off-market, and publicly listed. Almost all villas go through three markets after the seller decides to sell.

    Market 1: The Private Market. First, sellers try to sell without using an agent. About half of all villas are sold privately, without being listed with an agent.

    Market 2: Off-Market. If they couldn’t sell private, then they list with an agent. A large percentage of villas are sold ‘off-market’ by the agent to their existing contacts, without being listed publicly or on the Internet.

    Market 3: Publicly Listed. If nobody wants to buy the villa, then agents list it publicly on the internet. These villas usually sit on the market for many years and don’t sell unless the owner dramatically lowers the price.

    The Current State of the Market

    According to reports, market analysis, and the economists, agents, buyers, and notaires we consulted, the majority of French Riviera villa properties asking more than €1 million are listed at unrealistic prices and are sitting on the publicly-listed market, often for years, until the seller lowers the price to be much lower than others on the market, with the average selling price being around 60% less than the original asking price, but some villas selling (eventually) for as much as 90% under asking.

    Many sellers are stubbornly keeping their villas on the market at 3x to as much as 8x actual value either because they are speculating or misinformed. These villas have been sitting on the market for years until the prices are lowered. The sold prices that you’ll see happening are when sellers reach the time where they must sell, and they are then forced to take an at-market offer, last-minute.

    One of the problems in this area is that agents frequently lie about the value of the villas so they can secure the listings, as owners generally choose the agents who tell them they can get more for their villa. Who would you list with — the agent who says your villa is only worth €850,000, or the one who promises to get you €4 million?

    Another issue is that the French Riviera gets a lot of speculators who own several ‘vacation rental’ villas. These sellers list at high prices and go ‘fishing’ for an ignorant buyer who will overpay (although it’s very rare that they find one). These villas sit on the market and do not sell because they are listed at rigid, ridiculous prices with owners that are not serious about selling.

    Mortgages: Lending Conditions Tightening in 2022

    Starting in 2022, the number of mortgages given out has been cut, and this will escalate into 2023 making it harder and harder to get approved for a mortgage. Real estate professionals have felt it: nearly half (47%) have seen an increase in the number of sales cancellations due to loan denials, and these cancellations are set to increase.

    A new law came into effect at the beginning of 2022 that requires people taking out mortgages to not have a monthly debt ratio of more than 35%. This means their expenditure, including the monthly mortgage repayment and any other loans or expenses the buyer might have, cannot be more than 35% of their income.

    The notaires’ latest report confirms that this is having an effect on mortgage approval rates. Additionally, a separate report carried out by mortgage broker Vousfinancer found borrowers who have an indebtedness level of under 35% are still being refused loans because of the distance between their work and their prospective home. 

    These new conditions, combined with a general tightening of mortgage conditions imposed by the banks, are already having an effect on the number of villas sold, and consequently will affect villa pricing over time.

    The War and Russian Villa Seizures

    Wealthy Russians own more than 2000 villas on the French Riviera, many of them belonging to Vladimir Putin’s closest friends. Due to Russia initiating war with the Ukraine, France and Monaco have already started seizing the assets and villas of Russians connected to Putin, plus their families, close friends, and anyone who may have benefitted from a friend’s connection to Putin. They are casting an increasingly wider and wider net, scaring many Russians into selling before they are sanctioned.

    This could soon have a profound effect on the real estate market, as potentially hundreds of luxury villas, previously owned by Russians, will soon be seized or voluntarily put on the market for sale.

    The French Riviera “is not a booming market as we used to have pre-2008, [when we had] Russian purchasers who were buying most everything at crazy prices,” says Sotheby’s (Hollywood Reporter, July 2021 article)

    Read our guide to Russian villa seizures & how this will impact the real estate market on the French Riviera, for more details.

    Aside from the largest cities, real estate in France has been struggling for the past 15 years. The French Riviera’s real estate pricing has performed much worse than most other areas of France, with the rural areas performing the worst.

    Sold prices have, for the past 15 years, been flat-lined or decreasing, aside from a temporary bump due to Covid of between 0.3% and 1.4% (1% average), depending on the area. Despite this, asking prices for publicly-listed villas remain far higher than market value and, consequently, most listed villas are not selling.

    Sold prices are predicted to swing downward and continue to be a seller’s market for the next decade or more due to factors described in this guide. That’s especially true for rural villas along the French Riviera.

    Real estate network Orpi reported that sales were down 17% in the first 3 months of 2022 compared to the same period in 2021.

    “Despite some neighborhoods performing strongly, prime price growth was largely static on the Côte d’Azur as a whole.” – Knight Frank (2021 report)

    • Be aware that real estate agents (and notaires) will almost always paint a rosy picture of the market. Their goal is to encourage people to list their homes, and to get buyers to feel an urgency to put in an offer (and the higher the offer is, the more profit they make on the deal). Remember this bias when you read articles about the market.

    Many buyers predict a drop in the prices of prestigious properties. According to the results of a study carried out in June 2020 by a large French real estate company, 63% of potential buyers are betting on a drop in prices. Conversely, this figure was 32% in 2019 when the majority of buyers bet on the stabilization of property prices (41%) or even an increase (27%).

    Henry Buzy-Cazaux, founding president of the Institut du Management des Services Immobiliers, in a recent interview with Le Revenu magazine, said, about sold prices, that “a fall in prices of 10% [in vacation markets such as the French Riviera] seems inevitable”, and speaking about the effects of the economy in France, he also predicted an overall real estate market decline of 30%.

    French Riviera Real Estate Market Predictions & Trends - real estate pricing south france 1
    The French Riviera: On a downward price trajectory

    Remember that you can't compare the French Riviera to France overall. There are regional differences in property price changes, and the French Riviera has far less growth than many other areas in France. For example, in 2021 the annual m2 sold price rose 12.4% in Rennes and only 0.6% in Nice. Paris alone pulls the ‘overall France’ real estate pricing trends way upwards.

    Buyers looking to acquire a villa in France increasingly favor lower priced properties, particularly those under €800,000, and there are significantly less buyers of high-priced villas. This trend has, in part, been caused by the coronavirus pandemic, which has meant fewer wealthy foreign buyers (who have instead bought weekend houses in their country of residence) and more local French buyers. 

    The change in proportion of total sales of villas / countryside houses varied by price bracket:

    • The proportion of villas that sold for under €800,000 increased from 30% in 2019 to 38% in 2021. 
    • Villa sales in the between €800,000 to €1 million increased from 15% to 22% in the same time frame.
    • Properties that sold for between €1 million and €2 million decreased from 35% in 2019 to 29% in 2021.
    • Properties that sold for over €2 million decreased from 20% in 2019 to only 11% of total sales in 2021.

    The easiest way to see the historic trends in pricing (and the recent sales prices) in a specific area of the French Riviera is on the websites listed below. Pricing is dropping, so keep in mind the time period that the estimation is based on. The longer the time period, the higher the pricing will seem, compared to pricing from the past several months alone.

    Warning: Agents hate the transparency that these sites provide, and they often lie in an attempt to convince you that they’re not accurate, when in reality the m2 prices displayed on these sites are higher than reality. Learn about their tricks, what they say and why its not true.

    Where does the data come from? The notaries website publishes a list of all the sales, including the m2 (which they dramatically underestimate), villa age, location, land size, sale price, etc. This is a very useful tool, and other websites (like JDN) scrape and aggregate this data to create accurate pricing averages by time period and location. The notaire website also creates their own charts with high, median, and low sale prices per m2 (but they falsely inflate the m2 prices.)

    • The JDN website is the only website here that isn’t biased. It doesn’t sustain from real estate sales or advertising, and doesn’t only focus on real estate. It is the most accurate to look at for real estate averages, as they pull in all the sales and also look at the m2 villa sizes advertised in sales listings, to display the most accurate data. The screenshots below are pre-Covid numbers. As of now, they haven’t updated their website to show Covid and post-Covid numbers, which are lower:
    French Riviera Real Estate Market Predictions & Trends - real estate projections france 2020 2021 1
    2017 up until the start of 2020
    French Riviera Real Estate Market Predictions & Trends - france real estate market outlook
    2017 up until the start of 2020
    • Notaries: Check this official notaire statistics website and this one (both will give the same pricing). They display charts showing the historic high, low and average sale prices over time. 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. Keep in mind that the m2 listed for the villas is, on average, 1/3rd of the actual villa’s size, which means that the average m2 pricing that the notaires publish is 3x higher than it should be, had they listed the m2 correctly. Learn more about this and why the notaires lie, in our guide to Scams & Secrets.
    • The Drimki website shows trends of real estate prices per town or area over time, including the high and low price per m2. Despite its obvious bias and inflated numbers, Drimki still shows lower prices than the notaires website, and it gives you an idea of the pricing over the years.
    French Riviera Real Estate Market Predictions & Trends - real estate pricing france2
    • 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.

    Expert Market Predictions for 2022 & 2023

    In 2022, the French Riviera is a buyer’s market, and will become even more so for many years to come, as foreign buyers increasingly purchase homes in their domicile countries, France aggressively disincentivizes second home and investment ownership, and –soon– the luxury villa market will be flooded with villas sold by, or seized from, Russians.

    “Tighter [mortgage] borrowing conditions and rising interest rates… The real estate market has shown signs of slowing down in recent months, due to the economic situation, the war in Ukraine, and the nibbling away at purchasing power due to rising inflation.” – JDN May 2022 report

    We consulted a number of top economists, investment advisors, and (honest) real estate agents and notaires, as well as recent buyers, about the publicly-listed French Riviera villa market, and these were our findings (this applies to villas on the French Riviera only).

    Keep in mind that the m2 listed below is the advertised m2, not the falsely low m2 listed by the notaires. The prices below reflect sold prices, not asking prices.

    Sold Prices of €3 Million+

    • Very high-end market
    • Sold prices of more than €3 million
    • Normally applies to exceptional, ultra-luxury villas of 700m2+, often with multiple villas on the property

    This market segment is very hard to gauge because there are so few sales in this category. Less than 5% of villas that are listed at more than €3 million actually end up selling for more than €3 million. In this segment, some of the overpricing is due to Russian’s needing to sell villas that they paid over-market for.

    The vast majority of villas that sold for this price were sold at between 65% to an astonishing 85% less than the original asking price, with the average discount being around 70%.

    Before the Russian sanctions started, our best estimation was that sold prices of villas that have sold would likely continue to slowly increase at a rate of approximately 2% per year, pulling the market higher than it otherwise would be. However, the fact that Russians will be selling, and the French government will continue to seize and sell Russian-owned luxury villas, is likely to push the prices much, much lower.

    Like in all market categories, villas that are overpriced are not selling, even if they are famous, highly-desirable villas. Sean Connery’s stunning seaside villa is a great example of this — its price was cut in half after a year on the market and yet it still hasn’t sold, after copious amounts of advertising and news coverage and more than two years on the market. A desirable Cap d’Ail villa owned by a Russian oligarch has been listed privately, for an undisclosed sum, since 2015, and publicly (by many agencies) since 2017, first for €30 million and now for €23 million — and it still hasn’t sold.

    This is because in-the-know financial advisors of wealthy buyers are predicting that the market is on a long-term downward pricing trend, because banks won’t authorize over-value mortgages, and Russians are no longer coming with suitcases of cash.

    We’ve seen many highly desirable villas that have sold over the last couple of years for a 70%+ discount off the original asking price. A couple of typical examples: in Beaulieu-sur-Mer, two huge and newly renovated sea-view villas on the same property that were originally listed at €18 million just sold for €3.6 million, and a highly-desirable villa with 100% unobstructed sea view on the tip of Cap Martin was listed at €4.9 million and recently sold for €1.8 million.

    Sold Prices of €1 to 3 Million

    • Mid-range luxury villa market
    • Sold prices of €1 million to €3 million
    • Normally applies to luxury villas of 250m2 to 700m2

    This segment saw a small bump in selling prices during Covid, of around 0.5%. We expect pricing to continue drop fairly significantly from 2022 onward.

    Villas in this bracket are selling for between a 40% and 80% discount off the asking price, as extreme overpricing abounds in this price range. There are many more sellers in this segment than serious buyers. Ultra-modern villas are in demand, while stone, old-seeming, and classic styles are not selling.

    These owners are often elderly and/or relying on vacation rental / tourism or other income that has been significantly disrupted. Expect to see an increase in distressed sales in this segment in coming years due to the aging Baby Boomers, the economy, foreigners selling due to increased taxes, the Russian villa seizures, and the continuing effects of Brexit.

    Sold Prices of €600k to €1 Million

    • Low mid-range villa market
    • Sold prices of €600,000 to €1 million
    • Normally applies to villas less than 400m2

    In this bracket, well-priced villas in good condition are selling very quickly, as COVID-19 has increased sales in this bracket by pushing local families to consider buying a villa instead of (or in addition to) their apartment.

    This segment saw a small bump in selling prices during Covid, of around 1.2%, but we expect pricing to be flat-lined 2022 onward.

    The primary buyers in this bracket are French families. The sellers in this segment are usually French citizens or British citizens. In both cases, they have motivation to sell (economic issues, divorce, Covid-related financial difficulties, etc.) and Brexit will continue affect this segment.

    Reasons Real Estate Prices Will Get Cheaper Throughout 2022 & 2023

    • The French government is actively trying to make real estate more affordable by adding cumbersome taxes for second homes and thinking up multiple other ways to disincentivize house-flipping, investment purchases, AirBnb rentals, and vacation homes. You can 100% expect more of this in the future.
    • The government has introduced new tax laws that went into effect this year which increased rental income tax from the old rate of 17% to the new rate of 40% for people who have annual income from furnished rentals exceeding €23,000 (which is low for the French Riviera), or whose rental income is greater than the sum of their other activity income. This makes vacation renting much less lucrative.
    • Banks have tightened their lending conditions and become even more cautious. Starting in 2022, the number of mortgages given out has been cut, and this will escalate into 2023 making it harder and harder to get approved for a mortgage. Real estate professionals have felt it: nearly half (47%) have seen an increase in the number of sales cancellations due to loan denials, and these cancellations are set to increase.
    • Because of Brexit, British people (estimated at between 25% and 40% of buyers / owners on the French Riviera) will have the amount of time they can spend in the EU (including France) reduced to only 90 days, and they will have to pay a lot more tax on rental income, as well as other new taxes. Mortgages are now more expensive and harder to get for UK residents, and the currency conversion is unfavorable, both making it more expensive than ever to buy outside of the UK. In addition, Brits have had a decrease in spending power due to their currency losing value. These factors are keeping British people from buying new properties on the French Riviera, and at the same time prompting many to consider selling their French Riviera vacation homes.
    • New sanctions on Russians have prompted wealthy Russians to sell their villas before they can be seized. Either way, Russian-owned villas and property seizures (due to the war) could soon flood the market with luxury villas, further driving down prices.
    • COVID-19 will continue to cause an influx of vacation homes on the market because of: job and business income losses, lowered income, deaths, and a decrease in high-spending tourists and AirBnb bookings. These factors will force many people to sell their vacation homes or downsize their primary residence. These issues will continue into 2023 and beyond because some countries (like India, Mexico, and Brazil, etc.) are many years away from vaccinating their population, causing travel blocks, trip cancellations, and variants that may be vaccine-resistant.
    • Baby Boomers, who are the majority of villa owners on the French Riviera, are getting up there in age and are getting too old or sick to maintain villas (or, sadly, dying of COVID-19), therefore selling their villas and moving into assisted living or apartments. There are not enough wealthy Millennials to pick up the slack (based on the lack of population and wealth in this demographic), and Millennials tend to prefer living in cities and the sharing economy (AirBnb versus owning).
    • The long-term economic debt cycle is due for downswing, which is very likely to cause a major global recession in the near future, which is likely to lower real estate prices (because credit will be much harder to get, among other factors) for about a decade.
    • Foreign buyers are now buying houses closer to home (within maximum two hours driving distance) and selling their villas in the South of France. This is due to several factors, including: working from home several days of the week, Brexit, and COVID-19.
    • Once a major buyer, Parisian buyers are now opting to buy villas within driving distance from Paris so they can work from home in comfort, but easily drive to their office.

    Foreign Buyers Are Decreasing

    In 2020, 1.3% of second homes were bought by people who were not residents in France. This is compared to 1.7% in 2010. This trend is predicted to continue in 2022, with the notaires expecting the proportion of foreign buyers of second homes to be no higher than 1.2% in the first quarter of 2022 and continue to fall from there.

    French Riviera Real Estate Market Predictions & Trends - french real estate predictions 2021 2022

    The French Riviera market (above, in pre-Brexit 2020), with 40% second homes, will loose a lot of its buyers due to Brexit.

    Market May Be Slow to Adjust

    Often, when buying activity slows, it takes some time for homeowners and real estate agents to adjust their expectations and lower pricing. In the meantime, realistically-priced properties may sell, but properties that do not adjust their pricing will remain on the market, often for years, until they adjust their expectations and lower the price to be in-line with the market (find out how to determine the correct pricing).

    Keep in mind that statistics that include the entirety of France are misleading as they include big cities like Paris and Marseille, where demand remains strong and prices are increasing. Rural and vacation-home areas like the French Riviera are, conversely, on a downward trajectory.

    Real estate agents and notaires get paid when you complete the purchase, and the more you spend, the more they make. So, naturally, they tend to be very optimistic about the market. They are incentivized to tell you that it’s a super-hot market and prices are going up, as this pressures buyers into feeling like they should buy sooner and for more money, and it incentivizes sellers to list their homes. Even in obviously soft or declining markets, agents and notaires will often tell you that it’s a hot market.

    Buying a Villa? Read This First!

    When you’re ready to look for a property, make sure to read our complete guide to buying real estate in France. These guides explain how to estimate a property’s real value, how to get the best price and avoid over-pricing, what to look out for, how to avoid getting scammed, and more. Here’s a list of our must-read buying guides:

    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 scams and secrets includes: warnings about the unethical tricks that agents, notaires, sellers, developers and builders use to get more money out of you. This is a must-read, and the whistleblower guide that those in the business don’t want you to see.

    Our guide to real estate agents includes: the dishonest things agents will tell you, how real estate agencies operate, buyer’s agents and property finders, why you should avoid illegal and non-local agents, and who to trust (an important warning).

    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. Plus, supplementary guide to Russians & their impact on the French Riviera real estate market.

    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, issues with buying a ‘newly renovated’ villa, 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, contract pitfalls, 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.

    Content is legally protected.

    Have a tip? Email [email protected]

    SearchArchive
    X
    ar العربيةzh-CN 简体中文nl Nederlandsen Englishfr Françaisde Deutschit Italianopt Portuguêsru Русскийes Español