rriving in Nice en-route to Cannes one cannot help but marvel at the blue skies and light, dancing off the water. The shine is accentuated when the Hollywood elite arrive for the Cannes Film Festival and all this begs the question ‘is all that glitters here really gold?’ Well in Cannes and the Côte d’Azur, the answer is yes, very nearly all. You can go back years, pre-Grace Kelly to find that this was one of the destinations of the rich and powerful. Film stars just gave it greater profile and an added gloss which seems to be repainted every year right back from Liz Taylor and Sinatra to Brad and Angelina. The $64 million question is ‘what’s it like to actually live here?
The opening gambit goes something like this... a minimum of 300 days of sunshine (tick). World class local produce and restaurants (tick). Stunning natural environment and greenery (tick). Fantastic maritime activity from swimming to sailing - certainly somewhere to moor that yacht (tick). I could go on, but this is already enough to stimulate buoyant enquiry in the second home market. It’s important to point out that there is a common culture of acceptance of wealth as a positive thing. This has helped foster a sense of belonging amongst a number of the residents I spoke to. There is also excellent international (English) schools challenging the stereotype that it’s a place just for retirees. It’s important to realise that when looking at the property market in this part of the world, not be dazzled completely by the sheer amount of wealth on show.
Yes high-end luxury shops abound and well heeled ladies nurse their morning espressos, sitting immaculately manicured at swish riverside cafés on La Croisette, yet the Cannes property market has not been immune from over pricing in recent years. Some sellers were being unrealistic and a ‘sensible correction’ was inevitable. ‘The crisis helped with this’, says property expert Jennifer Charbit from Beauchamp Estates. You would be pushed to find an apartment for less than €2 million in central La Croisette and demand remains high. The Côte d’Azur has many enclaves, communities and types of sell from hillside to riverside.
Moving up the coastline between Nice and Monaco you’ll find the exclusive St Jean Cap Ferrat. This is the land of Oligarchs who in my experience tend to favour period properties with the attraction here being Belle Epoque splendour; high ceilings, crafted detail and organic lines. That said, planning laws have relaxed to the point where contemporary homes are being built in the same locale. This affords you the ability to factor in to your villa, numerous bedrooms and bathrooms an adjoining guesthouse, private cinema, rooftop pool and beautifully landscaped exterior green space. A six bed, six bathroom property achieved rental in peak season (July, August) of just over €90,000 a week. For those who opt for the extra security of the hillside, the choice is Californie. This gives the added value of looking down on to not only idyllic sea views but the social swirl that is La Croisette.
I was shown Alang Alang, a breathtaking, Balinese style, modernist creation still in progress. Glass, wood and stone were in abundance but more importantly was space with huge sun terraces and outside dining areas. The attention to detail and added luxury is not lost on the rental market who demand all the trimmings. Repeat renters ‘often go on to buy the property they have been renting’ explains Jennifer. This makes upgrading an essential part of any home owners investment strategy.
Cannes based Jonathan Gray of Beauchamp Estates talked of the ‘booming rental market, particularly in peak season’. There are a healthy number of affluent holidaymakers who arrive for the summer season. Some of the weekly rental figures can frequently exceed €100,000, yet compared to their seafaring equivalent are great value, as some of the figures discussed for yacht rentals exceeded €800,000 per week.
Ratios of yacht to traditional property rental are thought to be about 4:1. An English couple who bought and immaculately renovated a modest sized five bedroom villa in Villefranche sur Mer near St Jean Cap Ferrat, achieved rental of €15,000 in peak season (July/August), through Beauchamp Estates. I came across a developer who had acquired and renovated one of the four waterfront properties in Cannes.
For those looking at something more manageable and sea facing he showcased a personal favourite, a maritime themed villa which opened up to stunning sea vistas and a private pathway to the water to swim or fish. It resembled a private oasis with views out to Cap d’Antibes. Playful, modern interior space was realised through a shrewdly arranged layout, juxtaposing natural woods and granite with stone and glass. The property, Villa Ithaque is on the market for €15 million (Beauchamp Estates). Fifty plus metres up the coastline stands a more traditional property well in need of a bit of an upgrade and polish.
This however, is still able to command rental of €35,000 a week and has accommodated the likes of Sean Penn and the late Dennis Hopper. In terms of buyer trends, the English are either downsizing, holding for rental or selling to cash in on favourable exchange rates. Buyers from the cash rich regions of Russia, Uzbekistan and Qatar tend not to blink too much at the figures. It’s a case of finding a Côte d’Azur location that fits in with their personal requirements.
How to buy
Beauchamp Estates property expert Jonathan Gray explains that the South of France has out performed the likes of Marbella and Ibiza and has ‘remained stable during the financial crisis’. He points out that ‘demand will always outstrip supply’ and for that reason the Côte d’Azur is seen as a ‘safer investment’ more than its other ‘second home’ rivals.
There are however, tax restrictions introduced by the current French government. Capital gains tax remains a sore point and exemption has been moved to 30 years of ownership. For some, quality of life trumps any tax obstacles but many are looking at perfectly legal solutions like taking loans from Monaco banks at extremely preferential rates in exchange for leaving a deposit for the bank to invest in stocks and shares.
This is where employing the right lawyer and notary is key. Your first step will be signing a preliminary contract (promise to sell and to purchase). This includes all the conditions of sale and states the period of completion. The buyer must transfer 5-10% deposit in the seller’s notary office. The period between the preliminary contract and the final deed is about 2-3 months but this period can be shortened with the agreement of all parties. Planning and existing mortgages are checked for in this period too. It can be a very quick process indeed if both parties are motivated to conclude. It is also important to note that it may be advantageous to set up a company to make your purchase.
Source: International Life Magazine