French Riviera Real Estate Market Predictions & Trends
Updated: November 19, 2021
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.
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.
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.
Here’s everything you need to know about the pricing trends in the French Riviera real estate market:
Trends in the Real Estate Market in France
According to reports, market analysis, and the economists, agents, buyers, and notaires we consulted, the majority of French Riviera villa properties between €1 million and €6 million are listed at unrealistic prices and are sitting on the 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 40% under original asking.
In 2022, the French Riviera will be a buyer’s market, and will become even more so for many years to come, as foreign buyers instead purchase homes in their domicile countries, and France aggressively disincentivizes second home and investment ownership.
As you can see in the below chart, aside from Paris, real estate in France has been struggling for more than a decade. It’s predicted to swing downward and continue to be a seller’s market for the next decade or more due to factors described below. That’s especially true for villas along the French Riviera (seen as green/’Rural’ in the chart below):
Expert Market Predictions for 2021 & 2022
We consulted a number of top economists, investment advisors, and (honest) real estate agents and notaires, as well as recent buyers, and these were our findings (this applies to villas on the French Riviera only):
In the very high-end market (sold prices of €5 million+), which applies to ultra-luxury villas of over 700m2, villa values will likely continue to slowly increase, pulling the market higher than it otherwise would be. Despite this, villas that are overpriced are not selling, even if they are famous villas. (Sean Connery’s villa is a great example of this — its price was just cut in half after a year on the market). We’ve seen other highly desirable villas that have recently sold for 60% off original list price (for example, in the highly-desirable town of Beaulieu, a renovated sea-view villa with two large guest houses that was listed at €10 million just sold for €4 million). This is because in-the-know financial advisors of wealthy buyers are predicting that the market is on a long-term downward pricing trend.
In the mid-upper range of the market (€3 million to €5 million), which applies to villas of 500m2+, villas have been selling for 30% to 65% less than the original asking price from mid 2020 until the current date, with the average discount being around 40%. While some of the below factors may affect owners in this bracket, in this price range, about half of the owners tend not to need to rent / AirBnb their villas. About half of the owners in this bracket also have enough savings to weather the COVID-19 economic issues without needing to downsize.
The low and mid-range market (€3 million to €1 million), which applies to villas of 200m2 to 500m2, have seen a large dip in selling prices, with many more sellers than serious buyers, and sold prices between 30% and 65%-off asking. 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 due to the aging Baby Boomers, the economy, and foreigners selling due to increased taxes and Brexit.
Most of the sales since mid-2020 have been in the lowest-priced bracket (€700,000 to €1 million), which applies to villas of less than 250m2, where well-priced villas 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. The primary buyers in this bracket are French families. The French do like to bargain and you can expect to get about 10% to 20% discount on the list price.
The above guide does not include villas that do not sell because they are listed at rigid, ridiculous prices with owners that are not serious about selling.
Slow to grasp reality: Despite these facts, many stubborn or misinformed villa owners are still listing their villas at unrealistic prices, often 2x to 3x times what they will eventually sell for. These villas have been sitting on the market for years until the prices are lowered. 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 €1.7 million, or the one who promises to get you €4 million?
Reasons Real Estate Prices Will Get Cheaper Throughout 2022
- 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.
- Because of Brexit, British people (a primary foreign buyer / owner 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. 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.
- E.U., U.S. and Russian sanctions on Russians with property abroad have prompted wealthy Russians to get rid of real estate abroad, and Russians were well-known connoisseurs of the Cote d’Azur. (More on this below.)
- 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 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 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.
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).
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%.
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.
Real Estate Market Historic Pricing Trends
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.
Where does the data come from? The notaries website publishes a list of all the sales, including the m2, 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. More about that below.
- 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 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:
- 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.
Warning: Agents hate the transparency that these sites provide, and they often lie in an attempt to convince you that they’re not accurate. Learn about their tricks, what they say and why its not true.
As you can see, even by the upwardly-biased notaire statistics, they can’t hide that the prices are dropping quickly, even in the most desirable areas, starting from before Covid-19, and continuing throughout Covid-19 and after France has been opened up again. The prices will continue to drop.
- 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.
- 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.
Russians: No Longer Buying
In the past, the French Riviera real estate market was used as a way for corrupt Russians to launder their money. This was so prevalent that the prices of luxury villas was all-but dictated by Russian buyers. Worldwide, people heard the stories of Russian oligarchs buying up French Riviera villas, at any asking price, as a way to get their money out of Russia. But, since 2014, Russian buyers have dried up, and this area has felt the fallout. Instead of buying, Russians are now trying to sell. But, nowadays, Monaco residents are savvy and price-conscious.
It’s true that in the past, you did occasionally see an overpriced villa sell for ridiculous prices — but these were only the largest, new modern sea-view villas with exceptional views in turnkey condition. In other words, villas they thought they could buy, hold, and easily resell to another Russian, when they needed clean cash.
But that hasn’t been happening for years now. And yet many French Riviera sellers are defiantly holding out hope, waiting for the Russians to come back — someday. But due to many factors, this likely won’t happen for decades — if ever.
Nowadays, those previously high-spending Russian buyers have almost completely stopped buying and (like the British) are instead trying to offload their villas. This is due to many factors, including the fact that France has created a detective tax task-force whose goal is to figure out which Russians own which villas, and not only tax them, but seize the properties, and press criminal tax-avoidance charges. Massive leaks like the Offshore Secrets (2013), Panama Papers (2016), Paradise Papers (2017), FinCEN Files (2020), and the Pandora Papers (2021) leaks are helping the French government seize luxury villas. On top of that, more and more U.S. and European sanctions are being imposed against Russia, making it difficult for Russians to move money, and giving the U.S. and French government the right to seize property.
- “One way in which illicit money allegedly moves out of Russia is via real estate. A rich person buys property in the West, without living in it… In Kerimov’s case, he was allegedly using this scheme in the south of France when he was arrested in Nice last year.” – NPR ‘Sanctions on Russia’ (2021) and more reading in The Daily Beast ‘An Arrest in France Freaks Out the Kremlin Kleptocracy’ (2019)
- “The year 2014 is a watershed because sanctions have since made it harder for politically-connected Russians to acquire overseas assets… Putin has been calling on Russian business to ‘deoffshorize’ for a decade… Post-Crimea, Russia embarked on the path of self-isolation, at first somewhat reluctantly because wealthy Russians, including Putin’s friends, had indeed developed something of a lifestyle dependence on their French villas… But then Putin and his entourage seem to have discovered that… Russia is big and diverse enough to satisfy anyone’s taste for luxury. The post-2014 chic includes majestic palaces on the Black Sea, the likes of which could never be built or bought on the Cote d’Azur.” – Bloomberg ‘Pandora Papers’ (2021)
- “According to Knight Frank research, transactions of apartments across the Provence-Alpes-Côte d’Azur region fell by 36 per cent in 2008 after the financial crash. But sales volumes started to recover quickly. Until 2014, buyers from ex-Soviet states were “driving the real estate market on all levels”, says Illovsky. “People would buy an apartment and renovate it in the hope they could sell it to a Russian for a high price.” Since the annexation of Crimea, the drop in oil prices and Russian fiscal reform, the number of Russian buyers, he says, has fallen by 90 per cent.” – Financial Times ‘Nice adapts to fall-off of Russian buyers’ (2018)
The French Riviera real estate market has felt the fallout, and will continue to. “Monaco real estate has nosedived an estimated 70 percent”, according to some reports (2017). “Russian buyers have dried up all along the Cote d’Azur,” says another real estate agent. It may take time, but once these sellers realize that the Russian money-tree has died, and that nobody else wants to pay 3x the actual value for their villa, prices will fall dramatically.
Buying a Villa? Read This First!
When you’re ready to look for a property, make sure you know all the scams and pitfalls. Our complete guide to buying real estate in France explains 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 real estate agents includes: the dishonest things agents will tell you, how real estate agencies operate, 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.
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, 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.