Following our recent team video message that you can now find on our YouTube channel HERE, very many people have contacted us inquiring about what impact this global health crisis will have on the real estate market. We have certainly all read and heard numerous diverging opinions on the subject and can see how difficult a question this is to tackle. Therefore, focussing solely on our region, the French Riviera, and after several hours of discussions on video calls (thank you Google Hangout, thank you Zoom!) between ourselves and with other experts, here is a summary of our thoughts:
What can we learn from past crises?
Context is important here. The French real estate market was hit by the global financial crisis of 2007-2008. However, the average consumer whose money was losing value took refuge in one of the last “safe” options, investing in property. Particularly in Nice, prices rose slightly after the crash, resulting in an inverse curb to what was anticipated.
In July 2016, Nice suffered a horrific and tragic attack, the result of which was immediate travel, hotel and homestay reservation cancellations. However, it was not before too long that trust in the market resumed.
Despite these devastating, recent events, the market on the French Riviera has maintained a slow but steady increase of approximately 10% in price per sqm of properties sold over the last twelve years (source: Multi-Listing Service, professional real estate database).
What is the general consensus?
The experts we have been talking to do not foresee a collapse of the real estate market. Instead, they expect a slowdown of the market as both buyers and sellers warily re-emerge to pursue their real estate projects. Although, some experts even expect somewhat of a surge from those frustrated by having been paralysed by the crisis to get back to their plans of buying and selling.
Moreover, the bank interest rates in France are still exceptionally low, which in turn remains very encouraging for buyers to pursue bank loan requests and invest in property.
What is so special about the French Riviera?
The French Riviera averages 300 days of sunshine a year and is easily accessible to all walks of Life thanks to its international airport and good public transport system. It boasts the best of all sceneries with the sea, mountains and vineyards, rich historical context dating back hundreds of years and is a vibrant hub between Italy, Switzerland and Monaco.
So what do we think?
As France is currently prioritising injecting funds into the health sector and keeping companies and employees in pocket – and rightly so – we can expect a financial backlash over the next couple of years as a consequence. The measure of this backlash will depend on how this is managed by the government.
However, when we focus specifically on our region, we are reminded that The French Riviera is not only a world-renowned and very sought-after location, it is also a proven stable market. Once the confinement is lifted and we are all allowed back outside, Life may – or may not – return to its usual ways. We may – or may not – learn from this global pandemic that has managed to wreak havoc to all of humanity. One thing is for sure though, people will still be attracted to the warmth of the sun, the sparkle of the sea and the many beautiful landscapes in-between and the stability of the market will be proven once again.
The Nice Homes Team
17th April 2020