The place to live: overview of the real estate market on the Cote d'Azur
My home is my castle, a particularly attractive one when it comes to the relaxing French Riviera and the Principality of Monaco. The corona virus has been circulating here too, but we have to admit that it is much more pleasant to spend time under the sun which shines 300 days a year, being surrounded by villas and mansions for every taste and budget.
It can be a small apartment where you find yourself in a little green paradise of flowers and trees from all over the world, or a fancy villa with a swimming pool and a wonderful sea view. It is your peaceful space which embodies your dreams and imaginations.
Owning the real estate on the Côte d'Azur can reflect your social status, namely your position in society, an opportunity for self-realization and, of course, a worthy investment.
What has changed in the real estate market over recent years? What do buyers prefer at present? What do you have to be careful about? And how to get the coveted loan as a foreigner?
These questions are answered by the expert of the market on the French Riviera, managing director of real estate agency Engel & Völkers Côte d'Azur, Maire-Claire Sangouard (M.C.S)
IPremium Lifestyle: What were the principal real estate market changes this year in the framework of COVID crisis? Have rental and purchase prices dropped significantly?
M.C.S: No decrease was recorded following the lockdown, which again proves the sustainability of investments in the South of France. However, there was an increase in the amount of French customers (+ 10%); in turn, European clients appeared as soon as the borders were open. Virtual tours provided by the agency have kept our customers interested in the property.
IPremium Lifestyle: What is your forecast for 2021? Which are the main focuses in the upcoming year for buying and rental sectors?
M.C.S: 2021 will be also a good year, perhaps even an excellent year! Investment in real estate remains a safe bet, particularly on the French Riviera. Considering the implementation of remote work, far from the overcrowded traffic of major French and European cities, and the great ease of movement thanks to our 2 international airports, investments on the French Riviera have a bright future ahead.
IPremium Lifestyle: What kind of property is in demand today? What are the Budgets and locations?
M.C.S: From the pied-à-terre for the weekend in Nice to the villas of Cap Ferrat or St Tropez via Cannes, all cities and budgets find their clientèle. In primary or secondary residence, the market is very active. The Var for its tranquility and the Alpes-Maritimes for its cultural life, tell us what you like, we will tell you where to live!
IPremium Lifestyle: What kind of property was the most in demand in 2020?
M.C.S: Lots of pied-à-terre with outdoor spaces and good rental profitability. The hinterland has regained its nobility for its tranquility and green spaces.
IPremium Lifestyle: How to get a loan to a foreigner from Russia who does not work in France? What is the main criteria for a Bank’s positive decision, what’s the average % rate?
M.C.S: To take out a loan in France non-residents are often asked to deposit at least 20% or even 50% of the total amount, depending on the bank, and of course all legal proofs of income.
It is better to choose a broker who can give advice on loans, banks and help with filing documents.
“Non-residents” pose a higher risk to banks. For this reason, the rates offered are 0.20–0.50% higher. Thus, the current offered rates can range from 1.6% to 1.9% for a 20-year loan.
To obtain a loan, you are requested to provide tax returns, balance sheets for the last 3 years (for entrepreneurs), bank statements for the last 3 months, documents confirming the presence of additional income (rental housing, dividends, etc.). In addition, citizens of non-EU countries must already own a real estate.
IPremium Lifestyle: Could you tell us more about pre-construction condo investments? What is the initial payment and how the payments are done on the next stages?
M.C.S: If the client decides to invest in real estate during the construction phase (VEFA = Vente en l'Etat Futur d'Achèvement = on the future state of completion), the process begins with the signing of a preliminary contract between the customer and the developer, who agrees to complete the construction within the agreed time frame and without changing the price, and with the subsequent implementation of the first guarantee payment (usually 5% of the total cost).
After that, you are given 10 days during which you can change your mind and brake the contract. At the end of this period, a VEFA contract is getting signed, which is drawn up and signed in the presence of a notary, after which the buyer undertakes to make step-by-step payments.
The buyer is also provided with an Individual Chart showing the progress of work and financing, in accordance with the following stages: construction opening (payment of 20% of the total cost), completion of the foundation (15%), laying the first concrete slab (20%), erection of walls (10%), water supply (5%), installation of external elements of the building (15%), completion of construction works (10%), delivery (5%).
Please note, If the project is financed with a bank loan, the loan package will be issued only after the completion of the work.
In this case, the client begins to repay the loan at the bank after receiving the keys and settling in the apartment.
Each payment required by the promoter results in interim interest accrued on the issued amounts. The repayment of the borrowed capital occurs only upon final delivery.
Thus, it is recommended to ask the banking institution to defer payment: return of capital (partial deductible) or return of capital and interest (total deductible).
IPremium Lifestyle: How much is a square meter price today in cities and their surroundings such as: Antibes, Mougins, Cannes, Nice, Beaulieu-sur-mer and so on?
• Antibes, the price for an apartment varies from 2,800 € / M² to 10,000 € / M², for a villa
from 3,500 € / M² to 16,000 € M²
• Cannes: apartments from 4,500 € to 40,000 € / M² and more, villa from 5,000 to 20,000 € /
M² or more
• Nice: apartments from 3,000 € to 10,000 € / M², villa from 4,000 to 10,000 € / M²
• Mougins: apartments from 2,600 € to 6,000 € / m2, villa from 3,500 € / m2 to 9,000 € m2
• Saint-Jean-Cap-Ferrat: apartments from 5,500 € to 16,000 € / M², villa from 8,500 € / M²
to 25,000 € and more
• Beaulieu-sur-mer: apartments from 4,500 €> 11,000 € / M², villa from 5,500 € / M² to
15,000 € M²
IPremium Lifestyle: What is the percentage of annual return on investments in commercial and residential real estate? How to make the right choice when buying (investing)?
M.C.S: In residential real estate, the return on investment is between 4 and 5.5%, with the additional possibility of taking advantage of one's pied-à-terre on a personal basis. Many foreigners prefer this kind of investment which will be self-financing without any problem.
It is important to have the support of an expert to avoid making a mistake. Every project is unique to each one according to the client’s preferences, whether it is going to be a turnkey or with renovation works required, top location or in the process of becoming a top location. The choice is vast but it is important to have a professional to analyze the entire technical file of the property (diagnostics, charges, etc.) in order to make a rational decision.