PRIME FRANCE REPORT 2021 - THE IMPACT OF THE PANDEMIC - Knight Frank
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P1 NEW YORK FO CUS 2021 PRIME FRANCE REPORT 2021 1 T H E I M PA C T O F T H E PA N D E M I C 2 PRIME PRICE PERFORMANCE 3 FUTURE TRENDS
P R I M E FR A N C E R E P O RT 2 02 1 P2 P3 P R I M E FR A N C E R E P O RT 2 02 1
OVERVIEW 15,500 ultra-high-net-worth individuals business, reversing the outflow of wealth
Prime property
(UHNWIs), each with more than US$30 evident during Hollande’s presidency.
KEY FINDINGS million in assets, a figure that is forecast The most desirable and most expensive
property in a given location, generally
to rise by 53% to almost 23,700 by 2025 7th & 16th arrondissements – defined as the top 5% of each market by
according to The Wealth Report 2021.
2020 2025
France’s top wealth enclaves
Forecast value. Prime markets often have a significant
France’s lifestyle, accessibility and 5 yr % change international bias in terms of buyer profile.
climate are major draws with Monaco Data from the French tax authorities
and the Côte d’Azur arguably home to reveals where in France the wealthy
I M PA C T O F T H E one of the largest concentrations
Millionaires 2,554,936 of wealth reside. In41%
3,608,769 2019 (latest available data),
PA N D E M I C globally. President Macron’s decision average wealth (based on property
in 2017 to remove the wealth tax on wealth only) was highest in Paris’ 7th Watch The Wealth Report 2021
France’s prime markets saw prices
Despite a challenging backdrop France’s prime residential everything except
UHNWIs 15,503 property assets, helped
23,692 arrondissement,53% whilst the 16th was home webinar in French or English
increase 1.3% on average in 2020 and
markets were resilient in 2020 as the pandemic sparked a cement the view that France was pro- to the largest number of taxpayers (8,853).
cumulative sales increased 5% in the six
reassessment of housing need amongst French buyers
months to February 2021
Billionaires 51 66 29%
UHNWIs in France to increase 53% by 2025 France’s wealthiest communes based on property wealth*
Green shoots low according to the Bank of France, down 2019
from 5.35% in 2008, meaning homeowners
2020 -8.2% 2020 2025 Forecast
PA R I S Following three national lockdowns, looking to relocate or purchase a second 5 yr % change
a delayed vaccine programme, closed home during the pandemic found it a 2021 5.8%
Commune name Average wealth in € Number of taxpayers
Prime prices across the capital dipped in
borders, and with its ski resorts shuttered, relatively affordable option. Further 7th, Paris 3,203,056 4,077
2020 but supply constraints along with big
France’s property market has operated assistance was provided by France’s 2022 Millionaires 2,554,936 3,608,769
4.2% 41% Neuilly sur Seine 2,895,472 3,524
capital spending (Grand Paris Project &
against a challenging backdrop over the Financial Stability Board which eased 6th, Paris 2,872,758 2,668
2024 Olympics) will support future growth last year. lending rules in 2020 allowing banks to 8th, Paris 2,847,048 2,107
But by June 2021, 40% of French raise the household debt threshold from 16th, Paris 2,833,570 8,853
UHNWIs 15,503 23,692 53%
17th, Paris 2,443,877 3,625
citizens had received a Covid-19 shot 33% to 35%. 2020 2025 Forecast 5 yr % change
14th, Paris 2,328,580 1,728
and the EU had unveiled proposals to
HNWIs Lyon 2,279,458 3,608,769 1,902
41.2%
end restrictions on non-essential travel Billionaires 51 66 29% 15th, Paris 2,236,794 3,137
and welcome back vaccinated visitors, a
UHNWIs 23,692 Boulogne Billancourt 2,224,112 1,780 52.8%
critical move for the world’s most visited
country that usually attracts some 90 Source: IFI *Cities with more than 20,000 inhabitants and 50+ wealth tax payees. Data includes
SOUTH OF FRANCE
Billionaires 51 66 29.4%
real estate rights and shares of real estate companies held in France and abroad
Source: The Wealth Report 2021 UHNWIs = Individuals with US$30m+ including primary residence
million tourists a year. At 1.11% mortgage rates are at
Monaco residents were a strong Since March 2020, France has spent a 50-year low according to the
almost 190 days in national lockdown, French residential sales up 5% in the year to February 2021
component of demand in 2020 Bank of France, down from 2020 -8.2%
Number of home sales, cumulative over 12 months
but the economic impact of successive
5.35% in 2008 France Ile-de-France Rest of France May-22 French Presidential & Legislative
March 2020 Pandemic Election
lockdowns has lessened each time, 2021 5.8% hits France
according to the French Statistics 1,600,000 2008 Global Financial
2012 Hollande becomes
Crisis
Office. This trend was replicated in the The return of the French 2022
1,400,000 4.2% President and increases
Feb-23 FIS Alpine Ski World Cup - Meribel & Courchevel
Wealth Tax
country’s housing market. 1,200,000
Paris was arguably hit hardest by the Cannes
1,000,000 St Jean Cap Ferrat St Tropez Prime France average
ALPS Recovery mode pandemic but analysis by our Paris 110
800,000 Summer 2024 Paris Olympics & Paralympics
26% of European UHNWIs are more research team shows only a small increase 105 600,000 2020 2025 PresidentForecast 5 yr % change
Macron restricts wealth
tax to real estate assets only
interested in buying a ski home as a result Residential sales largely halted in Q2 in households relocating from central Paris 100 400,000
2020 as the housing market shut down, to the suburbs. In the second half of 2020,
HNWIs 2030 Grand Paris3,608,769 41.2%
Project due for completion
of the pandemic 95 200,000
but subsequent lockdowns have seen some 34% of those Parisians that left the
90 0 UHNWIs 23,692 52.8%
momentum maintained with annual sales city centre moved to the inner suburbs,
Apr-04
Sep-04
Feb-05
Jul-05
Dec-05
May-06
Oct-06
Jan-08
Jun-08
Nov-08
Apr-09
Sep-09
Feb-10
Jul-10
Dec-10
May-11
Oct-11
Mar-12
Aug-12
Jan-13
Jun-13
Nov-13
Apr-14
Sep-14
Feb-15
Jul-15
Dec-15
May-16
Oct-16
Jan-18
Jun-18
Nov-18
Apr-19
Sep-19
Feb-20
Jul-20
Dec-20
Feb-21
Mar-07
Aug-07
Mar-17
Aug-17
volumes up 5% between August 2020 and up from a ten-year average of 30% and 85
51 66 29.4%
Billionaires
February 2021. Rural departments such 11% moved to the outer suburbs, up only 80
Source:
2015 Knight Frank Research,
2016 Macrobond, CGEDD
2017 according to DGFiP
2018(MEDOC) and notarial
2019bases 2020
as Aude, the Dordogne and the Pyrénées marginally from a ten-year average of 8%.
have seen some of the largest increases in French buyers dominated sales in 2020 as
sales year-on-year. international travel bans curbed overseas France: A lower purchase tax for new-build homes Key dates ahead
OUTLOOK demand. In 2020, 60% of prime sales Purchase, ownershipFrance
and sale* costs (% of property price)
Ile-de-France Rest of France March 2020 Pandemic
hits France
Prime France will remain a sellers’ market Cheap finance & stimulus support agreed in France by Knight Frank were to Purchase
1,600,000 Own Sell Purchase 2008 Global
Own Financial Sell May 2022 French Presidential & Legislative Election
Crisis 2012 Hollande becomes
until Q1 2022 as more pent-up demand French buyers or overseas nationals based 1,400,000 President and increases
is released and borders reopen but
The French Government has deployed in France, the highest on record. Wealth Tax
February 2023 FIS Alpine Ski World Cup – Meribel & Courchevel
1,200,000
€604 billion in additional spending and 2.4% 2% 5%-7% 7.5% 2% 5%-7%
activity will slow ahead of the May 2022 1,000,000
Presidential Election
liquidity support, including a furlough Pent-up demand released in 2021 Summer 2024 Paris Olympics & Paralympics
800,000
scheme that covers 84% of net wages for New-build property** Existing property President Macron restricts wealth
600,000 2030 Grand Paris Project due for completion
residents earning up to €6,927 per month. A surge in overseas demand is likely once tax to real estate assets only
Source: Knight Frank Research. * Excludes Capital Gains and Social Taxes **VAT of 20% applies to a new-build
400,000
At 1.11% mortgage rates are at a 50-year borders reopen. France is home to over purchase but buyers can claim a rebate if they commit to renting the property for 20 years
200,000
0
Apr-04
ep-04
eb-05
Jul-05
ec-05
ay-06
Oct-06
an-08
un-08
ov-08
Apr-09
ep-09
Feb-10
Jul-10
Dec-10
May-11
Oct-11
Mar-12
Aug-12
Jan-13
Jun-13
Nov-13
Apr-14
Sep-14
Feb-15
Jul-15
Dec-15
May-16
Oct-16
Jan-18
Jun-18
Nov-18
Apr-19
Sep-19
eb-20
Jul-20
ec-20
Feb-21
ar-07
ug-07
Mar-17
Aug-17P R I M E FR A N C E R E P O RT 2 02 1 P4 P5 P R I M E FR A N C E R E P O RT 2 02 1
Charles de
PARIS
Gaulle Airport
Supply constraints wider market. Average prices in the area Paris’ residential market in 2020. Widening
registered 7% price growth compared to house price-to-income ratios indicate
Strict building regulations and five 5% for Paris as a whole in 2020 according deteriorating affordability and stronger
Montmartre
8th Arr. UNESCO world heritage sites mean to the Paris Chamber of Notaires. In rental demand in the coming years. The
16th Arr. Significant investment in infrastructure over the next decade new-build opportunities in Paris are scarce. addition, close to €4 billion is being 20-39 year age group, a key component of
Louvre means the city is primed for growth The pandemic has further exacerbated the earmarked for the 2024 Paris Olympics rental demand in most cities, currently
issue with new construction delayed. The and the two projects will dovetail to accounts for 31% of Paris’ total population
R
Eiffel Tower number of building permits obtained in provide significant economic stimulus for according to Oxford Economics.
IV
ER
7th Arr. Firm fundamentals super-prime segment (US$10m+) held 2020 remained relatively stable (-3%) the north and west of the city.
SE
6th Arr.
Outlook
IN
firm in 2020 with 13 sales recorded in while housing starts fell by 34% year-on-
E
A shortage of stock, record low interest total, mirroring the number seen in 2018 year. On average, only 4,000 new Cash is king
rates, strong investment in infrastructure, and 2019. residential units have been launched each Headwinds come in the form of higher
together with a reassessment of lifestyles, year over the last decade. Looking ahead, Despite low interest rates, Knight Frank’s government debt which may weigh on
meant Paris’ residential market proved Hôtel particuliers in demand the potential
Paris repurposing
Prime of commercial
France average partners in Paris, Junot Fine Properties, plans for key infrastructure projects
largely resilient in 2020. stock to bolster residential supply offers reported a strong uptick in cash buyers (Grand Paris and 2024 Olympics) and
125
With around 80% of Greater Paris’ one possible solution but Knight Frank since the start of the pandemic. Some analysts forecast it will be 2023 before
Stop-start in 2020 housing stock equating to apartments,
120
research shows it is offices in the outer 87% of prime purchasers opted for a cash tourist numbers in Paris return to 2019
the pandemic-induced demand for space 115 suburbs, not in central districts such as La purchase, keen to use property as a store of levels. However, there are some significant
Along with other global cities, viewings pushed the premium for houses even 110 Défense, that will lend themselves best to capital and a means of wealth preservation tailwinds too. Paris’ large financial
and transactions were halted for several higher. Of the properties sold in 2020 by 105 being converted. during a period of heightened uncertainty. services sector, high productivity rates
weeks in the second quarter of 2020 Knight Frank’s partners in Paris, Junot and above-average incomes, along with
Most active prime price band leading to spikes in activity when Fine Properties, 83% benefitted from
100
Major investment ahead PRS uptick significant infrastructure improvements
95
€2m-€4m restrictions eased. Residential sales outdoor space.
90
planned in the next decade, will boost the
across the Greater Paris region totalled Of note was the demand for ‘hôtel The Grand Paris Project, Europe’s largest Compressed yields across the city’s key local economy.
187,100 in 2020, down 12% year-on-year particuliers’, these large historic 85 transport initiative over the next decade, commercial sectors are helping to promote
2015 2016 2017 2018 2019 2020
Annual % change, 2020 but strong activity was evident between homes, often with gardens and swimming is set to deliver four new train lines and 68 the private rented sector (PRS) in the
June and September 2020. pools, are rare finds but those that did new train stations by 2030. Prices in the Global eyes of investors, given they offer both
-2.3% The prime segment, defined as the come to the market attracted strong Hauts-de-Seine department – one of the diversification and long-term income-
top 5% of the housing market, saw interest. Of the eight sold in 2020 (where
Transactions Volume (€m)
main beneficiaries along with Seine-Saint- driven benefits. Institutional investors Download our Paris
Average (€m)
Residential Report
prices soften 2% in 2020 as travel bans sales data is available), five were located in 2018
Denis – 13are already outperforming the ploughed some €700 million154 into Inner €11.8
Direction of price hampered overseas demand although the 16th arrondissement, two in the 7th and
growth in 2021 some investors were willing to purchase one in the 18th with an average sale price of 2019 13 172 €13.3
via virtual viewings. Despite this, the €20.6 million overall.
2020 13 244 €18.7
Paris – competitive on the global stage
€ per sq m, Q1 2021
Key prime neighbourhoods
54,850
6th, 7th, 8th, 16th Paris Prime France average
With around 80% of Greater Paris housing stock equating 125
to apartments, the pandemic-induced demand for space 120 37,330
pushed the premium for houses even higher. 115
27,990
110
24,480 23,730 23,390
20,490 20,000 19,600
105
Paris: Prime residential price 100
Indexed, 100 = 2015 95
Prime prices compared Monaco Hong Kong SAR London New York Geneva Singapore Los Angeles Vienna Paris
90 Source: Knight Frank Research
Q1 2021 Paris Prime France average
85
125 2015 2016 2017 2018 2019 2020
L O CATIO N € P ER S Q M Super-prime sales steady
120 Global
Transactions over US$10m*
Paris - prime average €19,600 115
Transactions Volume (€m) Average (€m)
110
6th Arrondissement €21,500 105
2018 13 154 €11.8
7th Arrondissement €20,800 100
95 2019 13 172 €13.3
8th Arrondissement €18,500
90
2020 13 244 €18.7
16th Arrondissement €17,600 85
2015 2016 2017 2018 2019 2020
Source: Knight Frank Research Source: Knight Frank Research Global Sources: Knight Frank Research, Junot Fine Properties *Exchange rate calculated as at 31 December 2020
54,850
Transactions Volume (€m) Average (€m)
2018 13 154 €11.8
37,330P R I M E FR A N C E R E P O RT 2 02 1 P6 P7 P R I M E FR A N C E R E P O RT 2 02 1
R
IV
ER
SE
N I
E
Saint Jean Cap Ferrat
C O T E D ’A Z U R LAKE GENEVA
FRENCH ALPS
Geneva Airport
SWITZERLAND
Mougins Despite some neighbourhoods performing Further up the coast in Cannes it’s a The pandemic-induced ‘call of the great and Chamonix (3.5%) registering the
Nice Cote strongly, prime price growth was largely similar story. Super Cannes and Cannes outdoors’ saw mountain living catapulted strongest increases.
d’Azur Airport Chamonix
static on the Côte d’Azur as a whole. Californie are attracting buyers from back into the spotlight given the lifestyle it Private and institutional capital is
Although French buyers and Monegasques central Cannes seeking a larger choice of Charles de offers; fresh air, privacy, exploration, views increasingly targeting the Alps due to the
Gaulle Airport Massif des Bauges
Cannes filled the gap left by Covid-restricted new, contemporary-designed villas. and open space. appealing tax regime offered on new-build
Natural Park
international buyers, the level of supply on Further east, Cap Martin, Villefranche Megève Knight Frank’s Attitude Survey in properties. By offering a fully serviced
the coast negated strong price growth. and St Jean Cap Ferrat saw strong demand The Wealth Report 2021 confirms the rental property for 20 years homeowners
That said, the pandemic-induced ‘race from apartment-based Monaco residents ITALY increasing appetite for ski homes. Globally, receive a 20% VAT rebate, an initiative that
for space’ continues with demand for villas at the start of the first lockdown, whilst 11% of wealth advisers said their clients applies nationwide.
strengthening at the expense of apartments. others sought small, manageable country were more interested in purchasing a ski Alpine resorts are transitioning into
Eiffel Tower
Split into three distinct markets – estates further inland near Valbonne Mougins home as a result of Covid-19, this figure year-round resorts investing heavily in both
St Tropez Méribel Courchevel
Central Côte d’Azur, St Tropez and its and Grasse. increased to 26% amongst European ultra- their ski and non-ski offering. Such plans
surrounding area, and the inland region With tourism and conferences key Val-d’Isère high-net-worth individuals. not only boost tourism but leave resorts less
Cannes
incorporating Mougins and Grasse, the income generators for the Côte d’Azur, With two ski seasons impacted by the exposed to concerns around climate change.
Most active prime price band area attracts a significant number of second the region has been buffeted by the pandemic, resorts in the French Alps are The key challenge of Brexit is perhaps
home buyers but is also home to a large pandemic but Cannes, which usually expected to see a busy 2021/22 season. surprisingly not, the 90/180 day rule, given
€3m-€5m foreign-born resident population. plays host to numerous flagship events Most active prime price band Since the start of the crisis demand that few British homeowners would usually
Another trend we’ve noted is the return each year, has announced the Cannes usually targeted hotel accommodation, spend more than three months in their
of ‘Re-pats’ – French nationals who have Film Festival and MIPIM will go ahead in €2m-€4m switched to the chalet rental market as ski home, instead it relates to the hiring
Eiffel Tower
Annual % change, 2020 lived abroad and want to resettle in the 2021, signalling some green shoots for the skiers looked to avoid communal spaces of British cleaning and support staff when
1.0% south of France due to the lifestyle it region’s tourist industry.
Annual % change, 2020
and have the option of balconies or outdoor offering guests all-inclusive stays. More
offers, many head to Mougins, Valbonne As policymakers around the world space during their stay. cost and bureaucracy will now be incurred
or Aix-en-Provence due to their good grapple with raising taxes to pay for the
2.5% French, Swiss and Italians flocked to the due to the requirements to employ French
international schools. Covid-19 crisis, several countries are now region when travel was permitted providing or EU nationals.
Direction of price
Despite high stock levels along the coast considering wealth taxes for the first time. holiday lets with a welcome rental boost
growth in 2021
there are pockets of constrained supply. For those relocating to the Côte d’Azur, the in summer 2020.
St Tropez
Direction of price
Demand exceeds supply along Pampelonne well-established French model is providing Sales in the Haute-Savoie and the Savoie
growth in 2021
Beach near St Tropez and notably in the reassurance to some, conscious that others departments which are home to the key
village of Ramatuelle in the €3m-€7m price could yet prove more draconian. resorts in the Alps increased by 2.5% and 3%
Key prime neighbourhoods bracket. With opportunities scarce, buyers respectively in February 2021 year-on-year
are looking further south to L’Escalet beach according to France’s CGEDD.
Download our Ten Reasons to
Saint Jean Cap Ferrat, St Tropez, and La Croix Valmer where more options Buy on the Côte d’Azur Prime prices increased 2.5% on average Download The Ski Property Report
Cannes, Cap d’Antibes, Grasse exist and at lower price points. Key prime neighbourhoods in 2020, with the resorts of Megève (4.5%)
Val d’Isère, Courchevel,
Prime prices compared Méribel, Megève French Alps: Prime price index
French Riviera: Prime price index
Q1 2021
Indexed, 100 = 2015 Indexed, 100 = 2015
L OCATIO N € P ER S Q M Cannes St Jean Cap Ferrat St Tropez Prime France average Chamonix Courchevel 1850 Megeve Meribel Val d’Isere Prime France average
125 125
St Jean Cap Ferrat €35,300
120 120
St Tropez €28,300 115 115
Prime prices by neighbourhood
110 110
Cap d’Antibes €25,500 Q1 2021
105 105
Cap d’Ail €20,000 100 100
LO C A T I O N € PER SQ M
Èze €20,000 95 95
90 Courchevel 1850 €26,100 90
Beaulieu sur Mer €20,000
85 85
Cannes €19,600 2015 2016 2017 2018 2019 2020 Val d’Isère €20,100 2015 2016 2017 2018 2019 2020
Source: Knight Frank Research
Villefranche sur Mer €18,500 Source: Knight Frank Research Courchevel 1650 €16,000
France offers a lower purchase tax for new-build homes The appeal of new-build homes in France
Saint Paul de Vence €16,000 The Côte d’Azur’s wealthiest communes based on property wealth* Courchevel 1550 €15,900
Purchase, owning and sale costs (%) Purchase, ownership sale costs
2019
Mougins €16,000
Purchase Own Sell Purchase Own Sell Méribel €15,900 Purchase Own Sell Purchase Own Sell
Commune Name Average wealth in € Number of Taxpayers Average tax in € Resort altitude Rental Season length No. of Journey time
Nice €10,000 (m) yield (weeks) second homes to Airport
Cannes 2,770,439 626 12,642 Méribel Village €14,700
Valbonne €9,500 Aix En Provence 2,192,630 875 8,895
Chamonix 1,035 4.3% 20 8,900 1 hr 10
2% 2% 5% 7% 2% 5% Megève €14,300 2%
Courchevel 2%
1,850 5%2.5% 21 7% 2%
5,200 5%
2 hr 5
La Garde Freinet €7,500 Marseille 2,191,555 1,444 8,731
Megève 1,110 1.5% 18 7,300 1 hr 9
Antibes 2,187,869 418 8,929
Fayence €6,000 Chamonix €11,900 Méribel 1,450 2.5% 21 6,400 2 hr 5
Nice 2,185,850 1,243 9,116
New-build Existing Val d’Isère New-build
1,850 2.5% 23 Re-sale
4,200 2 hr 45
Source: Knight Frank Research Source: IFI *Cities with more than 20,000 inhabitants and 50+ wealth tax payees. Data includes real estate rights and Source: Knight Frank Research
shares of real estate companies held in France and abroad Source: Knight Frank Research, UBS, Ski Club of GBP R I M E FR A N C E R E P O RT 2 02 1 P8 P9 P R I M E FR A N C E R E P O RT 2 02 1
Bonnieux
PROVENCE GERS &
THE DORDOGNE
THE DORDOGNE
Bergerac Airport
Bonnieux Provence has arguably been the busiest Swiss, German and Benelux buyers have
Saint-Rémy-
de-Provence of all Knight Frank’s European markets been active, tempted by the region’s easy
since the start of the pandemic, both in accessibility by road.
terms of enquiries and sales. Traditionally, the property market in on average 5% higher than in 2015 but at
Eygalières Luberon
Natural Park Across the key departments of Space and wellness the South West lags the rest of France’s around €1,800 per sq m significantly lower
Vaucluse and Bouches du Rhóne, over prime markets by six to 12 months, which than second home hotspots in Provence,
Alpilles Natural Park The appeal of green space, views and wellness
51,000 sales were agreed in the year to suggests we are likely to see activity the Alps or the Côte d’Azur.
Maussane-les-Alpilles makes Provence an obvious choice for many
February 2021, up from just over 48,000 Condom strengthen as French buyers continue Buyers are typically seeking a
seeking a retreat in future post-pandemic
in the 12 months to August 2020. Prime to relocate or purchase second homes traditional French farmhouse priced
times. Knight Frank’s Attitude Survey in
sales in Provence’s ‘golden triangle’ which in key hotspots such as Bergerac, Auch between €800,000 and €1.2 million
The Wealth Report 2021 confirms that 47%
stretches between the medieval villagesEiffel Tower
of respondents are more likely to purchase a
and Condom. This should also coincide Eiffel Toweror more generous accommodation
of Gordes, Ménerbes and Bonnieux have Auch with travel restrictions easing for those in the form of a chateau in need of
rural home as a result of Covid-19, this figure
seen a notable uptick in activity. international buyers from further afield. modernisation.
rises to 52% amongst European UHNWIs.
Prime prices increased 1.3% in 2020 Popular with British buyers, Brexit
and in 2021 we have seen a marked will have a bearing on buyer sentiment
Rental prospects
acceleration with prices rising around 5% in the region but the overlap with the
Most active prime price band Most active prime price band
in the first five months of the year as tight With France’s borders still closed to most pandemic has made it hard to gauge
€800,000-€2m supply and strengthening demand put tourists, it is likely to be 2022 before overseas €800,000-€1.2m to what extent British homeowners
upward pressure on prices. demand starts to recover but around the world Work is due to start on a will either sell up, apply for French
The region is home to over 270,000 2021 is likely to be the year of the ‘staycation’ high-speed TGV trainline in citizenship or opt to rent their second
Annual % change, 2020 second homes and they account for and France is no exception, demand from Annual % change, 2020 2024. The new direct rail link home for longer periods now that they
11% of all housing stock. French holidaymakers is notably strong in are subject to the 90/180 day rule.
1.3% Although more peripheral locations are the region. In pre-pandemic times a four- 1.5% between Paris and Toulouse
When travel was permitted in 2020,
still attracting interest from value hunters bedroom property in St Rémy could achieve will stop at Bordeaux cutting Belgian and Dutch buyers were also
the pandemic has seen buyers retreat between €4,000 and €8,000 per week and journey times from Paris. active in the region.
Direction of price to established core markets that offer would comfortably be rented out for four Direction of price Work is due to start on a high-speed
growth in 2021 amenities and a sense of community. to six months of the year. Popular rental growth in 2021 TGV trainline in 2024, five years ahead
destinations include St Remy de Provence, Gers & The Dordogne are home to of schedule. The new direct rail link
Diminishing stock Eygalières, Bonnieux, Gordes and Ménerbes. some 36,241 second homes, accounting for between Paris and Toulouse with a stop
13% of all homes in the two departments at Bordeaux will cut journey times by 90
Stock levels are slowly being depleted
according to France’s National Statistics minutes to three hours making it an easy
after a frenetic period of sales activity Download our Ten Reasons to
Key prime neighbourhoods Key prime neighbourhoods Office, INSEE. weekend bolthole for Parisians, those
driven in the main by French buyers. Buy in Provence
Unbuffered by the pandemic, the located in the north of France as well as
St Rémy, Eygalières, However, when travel rules permitted,
Auch, Condom, Bergerac number of existing property sales in international buyers who fly into Paris’
Bonnieux, Ménerbes the region totalled 17,061 in the year to major airports.
French Riviera: Prime price index February 2021, an increase of 3% year-on-
Provence:
Indexed, 100Prime
= 2015price index year according to France’s CGEDD.
Indexed, 100 = 2015 Prime prices by neighbourhood Following a 30% decline in prime
Prime prices compared 125
120
Q1 2021 prices in peak-to-trough terms in the wake
125
Q1 2021 115
120 of the global financial crisis, prices have
110
115 LO C A T I O N € PER SQ M nudged higher but at a slower rate than Sign up to our French Research Updates
105
110
L OCATIO N € P ER S Q M 100 neighbouring regions. Prime prices are
105 Bergerac €1,850
95
100
Eygalières €8,500 90
95
85
Auch €1,750
90
2015 2016 2017 2018 2019 2020
Ménerbes €6,900 85 Condom €1,700
2015 2016 2017 2018 2019 2020
Gascony & The Dordogne: Prime price index
Gordes €6,700
Indexed, 100 = 2015
Source: Knight Frank Research Source: Knight Frank Research
Gers & The Dordogne Prime France average
Aix en Provence €6,400 Sales increase during Covid era
125
The number of existing home sales in Vaucluse & Bouches du Rhone, cumulative over 12 months
Saint Rémy de Provence €6,200 120
115
Bonnieux €5,900 110
105
Maussane les Alpilles €5,500
100
L’Isle sur la Sorgue €3,800 95
50,009
48,099
49,984
49,402
52,955
48,678
49,106
50,164
50,319
48,017
48,317
48,127
51,310
53,113
90
50,009
48,099
49,984
49,402
52,955
48,678
49,106
€3,600
50,164
50,319
Vaison la Romaine
48,017
48,317
48,127
51,310
53,113
85
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
20 20 20 20 20 20 20 20 20 20 20 20 21 21 2015 2016 2017 2018 2019 2020
Source: Knight Frank Research Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Source:
20 Knight
20 Frank20
Research,
20Macrobond,
20 CGEDD
20 according
20 to20
DGFiP (MEDOC)
20 and notarial
20 20 bases
20 21 21 Source: Knight Frank Research
The appeal of new-build homes in France
Purchase, ownership sale costs
Purchase Own Sell Purchase Own SellP R I M E FR A N C E R E P O RT 2 02 1 P10 P11 P R I M E FR A N C E R E P O RT 2 02 1
EXPERT VIEW
Mark Harvey, Knight Frank’s Head of International Sales,
reflects on the outlook for France’s prime
residential markets post-Covid-19
Back in March 2020 the outlook for the arrondissement which achieved €42,500 Smaller budgets, more risk averse in June 2020 – Provence, inland Cannes, the
French housing market was troublesome, per sq m, setting a new record. French side of Lake Geneva, Chamonix, The
Paris Prime France average
but fast forward to June 2021 and we’ve seen Cash buyers were not exclusive to Paris, What we term our core buyers, those Three Valleys as well as parts of South West
surprisingly robust activity due in no small we saw a number elsewhere in France 129 looking to spend between €1m and €3m, France such as Gers and Gascony where
France will chime with
part to the appetite from French buyers. where the words ‘not subject to finance’ 124 will be more risk averse than their high good value still persists.
It will be a sellers’ market those buyers for whom
Last summer saw three phases of were always met warmly by sellers and 119 net worth counterparts. I expect buyers Buyers will revert to tried and tested
until early 2022 as we see more activity, firstly a surge in interest from often helped to facilitate negotiations. 114 with lower budgets will wait out the sales prime markets, I expect they will be less wellness and wellbeing is
pent-up demand released, French buyers, this happened almost 109 boom. Not only are core buyers less likely likely to go off grid in search of value and even more of a priority as a
we will then see the usual immediately when the first lockdown eased The generation gap 104 to offer the asking price, which in the remote living. result of the pandemic.
seasonality return to the in mid-June and was followed by an uptick 99 current climate in some markets can see
market and the exuberance in demand from near neighbours – German, The average age of our prime buyers 94 you outbid, but they will be slower to travel Making up for lost time
of recent months die down Swiss and Benelux buyers. The last to the has declined, purchasers in their fifties 89
if costly tests and quarantine periods are
party were the British and although travel looking at early retirement are no longer required. This means the top end of the The French Alps, where skiers will be pandemic. For those wanting a healthier and
in the run up to Presidential 84
bans have frustrated many attempts to the dominant profile, instead thirty or market will continue
2015 2016 to outperform.
2017 2018 looking to2019
make up for two
2020lost seasons, better balanced lifestyle France continues to
Election in May 2022.
undertake viewings and progress sales, fortysomethings with a job and family will be one market to watch and here we
Global tick numerous boxes.
new enquiries have been buoyant in 2021. commitments account for a larger number. Tried and tested expect rental demand to be robust in
France’s lifestyle and culture, along Transactions Volume (US$m) 2021/22. France will also chime with those Contact Mark to discuss any
Average property
(US$m)
with record low interest rates, an uptick The year ahead Markets most in demand in 2021 will mirror buyers for whom wellness and wellbeing requirements you might have in France
in French staycationers and a pipeline 2018 those we13 saw take off when lockdowns eased is even more of a priority as188
a result of the $14.5
of significant transport improvements The next few months will be far from
2019 13 211 $16.2
will encourage overseas buyers once straightforward, but I think we’re moving
Notable sales since the start
borders reopen. in the right direction. Anyone expecting
of the pandemic 2020 13 298 $22.9
an immediate recovery of cross-border
Top ten departments in France with the largest number of second homes
Flight to safety transactions will be disappointed. A lot 2019
L O C ATIO N ACHIEV ED P RICES hinges on the vaccine rollout, new variants
Source: Knight Frank Research
One surprise trend was the extent to and government decisions around travel.
Mougins c.€40 million 127,879 124,253
which Paris became a safe haven for Once borders start to reopen we could see
wealthy French residents at the start of the UK and US buyers account for a higher 102,746
Super Cannes €15 million 98,106
pandemic. Cash buyers accounted for over proportion of French sales than usual given
85,286
80% of prime purchasers in Paris in 2020 their advanced vaccination rates.
Provence
72,854 71,987 67,569
€8.5 million despite cheap debt being easily available. It will be a sellers’ market until early 65,172 64,003
As the scale of the crisis became clear 2022 as we see more pent-up demand
Chamonix €20,000 per sq m domestic buyers, nervous about the released, we will then see the usual
direction of stock markets and the liquidity seasonality return to the market and the
6th Arr., Paris €45,500 per sq m of banks, moved their funds into property exuberance of recent months die down in
as a means of wealth preservation. Several the run up to Presidential Election in May Alpes-Maritimes Var Paris Hérault Haute-Savoie Savoie Vendée Charente- Loire- Gironde
Maritime Atlantique
big-ticket sales were concluded as a result 2022, it is unlikely we will see any changes Source: Insee
Source: Knight Frank Research including a Knight Frank sale in the 6th to the tax landscape in the interim.SALES
RODDY ARIS JACK HARRIS
MARK HARVEY
Paris and French Alps Côte d’Azur and Gascony
Head of Department
+44 20 7861 1727 +44 20 7861 1139
+44 20 7861 5034
roddy.aris@knightfrank.com jack.harris@knightfrank.com
mark.harvey@knightfrank.com
LAETITIA HODSON EDWARD DE MALLET MORGAN ANDREW BLANDFORD-NEWSON
Provence Prime Sales France and Monaco Côte d’Azur
+44 20 7861 1083 +44 20 7861 1553 +44 20 3640 7048
laetitia.hodson@knightfrank.com edward.dmm@knightfrank.com andrew.blandford-newson@knightfrank.com
VALUATIONS
MARIE CAMERON RICHARD SELBY VERONIQUE CASTAING
Head of Residential Valuation & Advisory France Residential Valuation & Advisory Residential Valuation & Advisory
+33 14 3168 894 +33 14 3168 861 +33 14 3168 871
marie.cameron@fr.knightfrank.com richard.selby@fr.knightfrank.com veronique.castaing@fr.knightfrank.com
RESEARCH AND PR
KATE EVERETT-ALLEN ASTRID RECALDIN
Head of International Residential Research Media Enquiries
+44 207 167 2497 +44 20 7861 1182
kate.everett-allen@knightfrank.com astrid.recaldin@knightfrank.com
WWW.KNIGHTFRANK.COM/OVERSEAS-PROPERTY
GUIDE TO BUYING
PROPERTY IN
FRANCE
t h e g l o b a l p e r s p e c t i v e o n p r i m e p ro p e rt y & i n v e st m e n t
2021 — 15TH EDITION
Guide to Buying Property in France 1 WR2021_FINAL_UPDATED_10.02.indd 1 10/02/2021 11:31
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