2007/ 2008
Property Trends
As with the rest
of France, the property market in the Languedoc-Roussillon
seems to be faced with some challenges for the year ahead.
By and large the region has seen stabilisation of prices
during 2007 following the startling rise in prices over the
past seven years. In the Herault department Alistair Inglis
of Luma
Property is nevertheless
optimistic about the next 12 months: ‘Property demand in
the South has continued to rise during 2007 and we expect
that to continue during 2008. The growth in prices has
slowed to about 7% overall and 2008 may see us drop back to
a rise of around 5%.’
The good news is that many local agents are repeating the
mantra: “it‘s a buyer’s market”. The bad news is that those
looking to sell their property need to be more realistic
about the price they can achieve. Also as exchange rates
and interest rates fluctuate in light of the global credit
crisis, buyers coming to the Languedoc-Roussillon in 2008
may find that their money doesn’t go as far as it used to,
and vendors may need to respond with more flexibility.
As Carcassonne-based estate agent Didier Calenge of
Aude Immo
Futur says: ‘The
average buyer’s budget is more often lower than the market
price because vendors are still overestimating the value of
their properties. As a result, professional estate agents
are advising vendors to be more reasonable in their
estimations and to accept the offers from buyers.’
At Med And
Mountain Properties in the
Pyrenees-Orientales, Louise Sayers tells a similar story:
‘Last year [2007] had a sobering effect on vendors in the
Pyrenees-Orientales, who had previously been reluctant to
acknowledge that the rate of increase in property values
has slowed since a couple of years ago. Those vendors who
got the price right in 2007 have had no problem selling,
and buyers look set to have a wider choice of well-priced
property in 2008,’ she says.
However, as the
Languedoc-Roussillon remains one of the most popular
relocation regions - with many key international businesses
setting up headquarters here - it seems that demand for
housing in the region will continue to be fairly strong.
Amongst French buyers looking to relocate to the region,
the trends suggest that the preference is for newly built
homes within commuting distance to the region’s most
dynamic cities. In fact, it seems that new-build companies
are rushing to meet the demands of the ever growing
population of the Languedoc-Roussillon – the Montpellier
agglomeration alone currently receives an average of 6000
new residents every year. In September 2007 regional
newspapers were reporting the significant rise in demand
for new-build properties in the region and it was reported
that new-build companies were set to reach record sales
levels in 2007 with a predicted 9.2% rise on sales compared
to 2006.
The knock-on effect, of course, is that prices per square
metre in the region’s cities are rising: in Beziers and
Nimes rising to around €2300 per square metre and in
Montpellier rising to €3100 per square metre. According to
commentators, the popularity in buying new-build homes is
also due to measures introduced by President Sarkozy to
assist first-time French buyers as well as concerns that
the current interest rates might rise. Property investors
might therefore look to cash in on this demand for city
dwellings: those who cannot afford to buy will certainly be
looking to rent and agents are reporting a 6 - 8% return on
rental property investments.
The
Languedoc-Roussillon continues to figure among the
top-ranking regions for tourism, with one report this year
placing it as the fourth most visited region in France. And
with good reason: the region has a wealth of important
historical monuments, a temperate Mediterranean climate,
diverse landscapes and excellent transport links. What is
also certain is that 2007 has seen a steady increase in the
region’s cultural standing and the feeling that regional
tourism is meeting ever higher standards of quality: there
has been a significant number of Languedoc-Roussillon
restaurants featured in the Michelin and Bottin Gourmand
guides; several planning permissions have been granted for
international standard golf courses; 2007 has seen high
profile performances by international stars such as Joe
Cocker (in Carcassonne), Joan Baez (in Perpignan), and
Bjork (in Nimes); 2007 was the year of the Rugby World Cup
in Montpellier and the Tour de France wound it’s way
through the region; furthermore, the launch of luxury
hotels such as the Couvent d’Herepian and the inclusion of
the Abbaye-Chateau de Camon in Tatler’s top 101 hotels all
serve as clear indicators that the Languedoc-Roussillon is
being seen as a serious alternative to the much more
expensive Provence/Cote-d’Azur region.
The region has also seen increased investment in its
transport infrastructure in 2007, with work continuing on
the Perpignan - Barcelona TGV link, a new Ryanair route
from Bristol to Beziers, and Eurociel charter airline will
be starting up routes from Nimes to several Mediterranean
destinations in 2008. It seems a fair bet, then, that
buyers could go some way towards paying off a mortgage on a
second home if it is also rented out as holiday
accommodation in the Languedoc-Roussillon, although buyers
should always keep the golden rule “location, location,
location” in mind, consider the implications of managing
holiday rentals and to expect a fair amount of competition,
especially in the most popular towns and villages.
Leaseback schemes offering hassle-free guaranteed income on
new-build developments are therefore becoming an
interesting alternative investment in the region, and are
worth researching if you are considering a long-term
investment.
Whilst prices level out across the region, and whilst
demand remains fairly high, those looking to invest in
property in the Languedoc-Roussillon will need to think
more carefully about where in the region they want to be
and what kind of property they need. Prices in the region
are still higher in the more popular Mediterranean areas
(along the coastal plains in the Aude, Gard, Herault and
Pyrenees-Orientales), compared to the less populated
mountainous areas (the Lozere, the interior of the Aude and
the Pyrenees-Orientales). As John Colclough of
Immo
30 in the Gard
department points out, you get what you pay for and the
idea of getting cheap properties in the Mediterranean parts
of the region is an illusion: ‘All the UK TV programmes
suggest that bargains can be found. In Southern France, in
the Mediterranean zone, this in NOT the case.’ On the other
hand, buyers will need to seriously consider the
implications of buying a cheaper property in the interior
of the region: greater travel costs and distances, fewer
local amenities, and greater isolation.
One interesting trend that has emerged in 2007 amongst the
non-French buyer is for permanent relocators, rather than
second homeowners. Louise Sayers says that 29% of their
2007 sales in the Pyrenees-Orientales were to customers who
bought permanent homes, compared with 71% of those who
bought a property for holiday use: ‘We continue to welcome
buyers from all age groups, rather than the predominance of
middle aged and retired people of a few years ago.’
Alistair Inglis concurs: ‘Most of our sales to British
buyers this year [2007] were for permanent relocations.’
There is a very positive energy across the region with
younger non-French couples looking for a complete lifestyle
change, coming into the region and setting up businesses.
For those who have got the necessary entrepreneurial and
linguistic skills, and who are prepared to do the research,
there are still plenty of opportunities to make a living in
the region. While running a B&B or property management
are still popular choices, there are a wide range of
successful ex-patriot entrepreneurs in the region, from
vineyard owners to activity holiday operators.
Alternatively, with such a large range of flight options to
the UK, Ireland, Paris and northern Europe, it is more and
more possible to consider commuting to work from the
Languedoc-Roussillon as a serious option.
So, the overall projection is that the property market in
the Languedoc-Roussillon will continue to offer good
investment opportunities for the more selective buyer,
particularly those looking to offer short or long-term
rental accommodation to the local and holiday market.
Prices will continue to stabilise across the region, as
vendors are encouraged to be more realistic when setting
the market price. The average non-French buyer in the
Languedoc-Roussillon is still predominantly over 50 and
looking for a holiday home, but there is an important
number of younger clientele moving South and moving
permanently to the region. The Languedoc-Roussillon as a
whole remains one of the most popular regions in France in
which live, thanks to its unbeatable climate, landscape,
cosmopolitan community and “art de vivre”.
The
Ultimate Property Guide to the Aude
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