STEWART COOK, Managing Director of Classic French Homes discusses why now is an opportune time to purchase property in the South of France
Classic French Homes specialises in the sale of superior residences across the South West of France with a portfolio comprising chateaux, chartreuses, country estates and period properties. Since my wife Michelle and I established the company in 2006, we have seen significant changes within the sector.
The market for international properties in France peaked in late 2007 and since then, the market has steadily declined. Prices are now down 45-50% from their peak at the mid- and top-end meaning that there are some fantastic opportunities for bargain purchases.
Many dream of owning an elegant second home in the South of France but are unsure of whether now is a good time to commit. We would advise that now, more than ever, is a shrewd time to buy to take advantage of favourable exchange rates and a market that has reached its bottom offering outstanding buying conditions.
Sales volumes in 2014 picked up noticeably at the lower end of the market (c.100-300k) – owing to a stronger pound and the convergence of investors’ buying power and vendor expectations. At the very top (over 3M) there has also been a significant jump in interest and commitment driven by a small but significant number of enthusiastic and opportunistic investors jumping at a very small pool of top-end properties that are competitively priced. Supply at the top end is very limited indeed with many would-be sellers holding off putting their properties on the market.
The middle market, particularly the 600-800k bracket has been last to show much life, but the latter half of the year has witnessed a lot more activity in this market, much of it buoyed by a resurgent UK market that is offering confidence and, most importantly for this bracket, the spare equity required to fund a purchase. The lack of bank lending is still hampering any surge.
Still difficult is the upper middle bracket – lying between 1.3M and 3M. Critically, this is the bracket limited by the threat of wealth tax for whom tax is a significant consideration (above which investors are so wealthy that they can afford it). It is this bracket between 600k and 3M that offers some sensational bargains.
Notable sales in recent months include a seven bedroom chateau valued at €2.4M in 2009 which sold for €1.3M Q4 2014. Similarly a five bedroom chateau with a swimming pool, tennis court, paddocks, formal garden, 200m of river frontage plus a stone boat house was valued at €2.25M in 2012 and just exchanged at €920k.
In conclusion, bargain hunters should move quickly to snap up well priced properties as I am now confident that the resurgence we have seen in the latter half of 2014 heralds the bottom of the market, and that future recovery is more assured. Savvy British investors must move quickly as bolder purchasers are already taking advantage of opportunities.
Stewart Cook is Managing Director of specialist real estate agency Classic French Homes who specialises in the sale of superior residences across the South West of France, with a portfolio comprising striking chateaux, chartreuses, country estates and period properties. Stewart studied Civil Engineering at Southampton University before joining the British Army. Following officer training at Sandhurst, he was commissioned into the Royal Engineers and served in the Queen’s Gurkha Engineers seeing tours in Hong Kong, Nepal, Canada and Bosnia. On leaving the Forces, he undertook an MBA at City University Business School (now Cass Business School), specialising in International Business Strategy, before embarking on a career in eBusiness Strategy Consulting for clients that included NatWest Bank and Red Snapper Ltd. in London, and Reuters in New York. The move to France in 2002 was due to be a year-long sabbatical – to renovate an old farmhouse – before returning to the City, but the quality of life in France has been all too alluring and the subsequent decision to stay was an easy one!