WHAT'S NEW IN FRANCE

Nice hits the radar for both commercial and residential investors

Author: Graham Downie, January 2019

Nice is an interesting case study in the value of not resting on your laurels. The city has plenty of laurels to rest on, given its splendid location on the Cote d’Azur and its long-standing reputation as a desirable tourist destination.

House prices have increased by 8% on average every year and the property sector has attracted a steady stream of foreign buyers looking for a second home in a Mediterranean climate and of international investors looking for a safe place to park their cash. The market has fluctuated, but Nice’s position in the top tier of global markets has long been assured. 

Yet the city has chosen to change and evolve, investing in infrastructure, transport and urban development. The airport, the country’s second biggest with over 12 million passengers a year and flights to destinations all over the world, has played a big role. The 40 mln euro Coulée verte or Promenade du Paillon in the city centre is just one of the several initiatives to make Nice greener.

Nice has looked beyond improving the attractions of the city centre and has been regenerating some areas in order to attract new residents and in so doing it has galvanised the property market. 

For example, the arrival of the Ligne 2 of the tram from Magnan to Parc Phoenix is transforming the Californie neighbourhood from an area best avoided to an up-and-coming place that can finally exploit its proximity to the beaches. The 10-minute tram ride to Place Massena is set to drive property prices higher.

On the opposite side of town Saint-Jean-d’Angely is another example of a neighbourhood to invest in because of its closeness to the newly revamped Riquier station and the University area connected by the tram Ligne 1. 

The tram Ligne 3, finally, will connect Plaine-du-Var, which already has several shopping centres and a football Stadium, to the city centre and to the airport. Areas like Liberation and Place di Pin are now more popular and house prices are shooting up. 

According to the latest Fnaim Cote d’Azur data, average prices have increased slightly to 4.446 euros/m2 in Q3 this year and are close to pre-financial crisis levels. Prices of super prime 10 mln-plus properties have declined due to less demand from Russian and Middle Eastern buyers, but there is evidence that they are being replaced by Europeans. Italians have long been the biggest buyers of second homes, accounting for 35% of the market, but Scandinavians, Dutch and Swiss have increased their presence recently. 

Prospects are positive as France’s enhanced international standing has put the country back on investors’ radar screens, while there is increased demand for euro-denominated assets from investors keen to diversify their portfolio.

The  ELAN law, which has just been approved, introduces new forms of rental agreements and could have an important role in encouraging people to buy apartments as an investment. Among other things, the law introduces the bail mobilité to facilitate professional mobility for tenants in temporary or seasonal work, internships and apprenticeships.

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