We sometimes lose sight that Nice can be a worthwhile investment for capital appreciation. Because so many of our investor buyers choose to work with us because of the high net annual return they can achieve (which can be as much as £45,000 for a two bedroom*), the capital growth element is often forgotten.
As more buyers choose to buy in Nice for themselves, to get away from the stresses of their high profile jobs, what they want is a private place of solitude, with meditative sea-views. Yet, no-one wants to waste money, even if you’re lucky to be able to afford to. It feels less like a guilty pleasure if you know that sea view you’re enjoying will be an easy sell-on and a long term piggy bank.
Notaires’ statistics sees the Alpes Martimes area grow by 1.7% at the end of 2015. However, According to Sebastien de Lafond, President of MeilleursAgents, Nice was the lowest city in France for capital growth this year, with Paris seeing a rise for the first time since 2011 of 2.9%. By contrast Nice has seen growth of 0.2%. Bad news? I don’t think so. The reason for the significant rise in Paris is that it has never been so good to borrow. With interest rates now as low as 1.8%, from 4% back in 2011 (and we thought they were good!), the domestic surge of people getting onto the housing ladder is pushing prices upwards. In other words, nationwide property prices are on the up, but Nice is slow on the uptake.
Why? Because Nice has always been a mecca for second home-buying; most domestic dwellers still rent. The Cote d’Azur remains the top destination in France for the purchase of second homes. BNP Paribas, one of our mortgage partners, tells us that, last year, there were at least 18,000 non-residential purchases in France and 20% of them were for properties on the French Riviera. Similar figures are expected for this year.
If that wasn’t enough, let’s not forget that due to the July 2016 attack, Nice has now been earmarked funds of €500,000 to promote the French Riviera, a programme led by Atout France. This is on top of the general funds allocated to promote Nice after the launch of the new tramline set to complete by the end of 2017. All of this can only be good news for capital growth, and the sooner the purchase, the higher the growth.
Foreign buyers can just as easily benefit from low interest French mortgages. Getting in quick means they can also benefit from the most capital growth long-term. We’d suggest that it needs to be done before domestic sellers start to see the fruits of Atout France’s promotional campaign, before the new tramline glides into action, and the new IKEA opens its doors. There’s a limited time before Nice once more turns more into a seller’s market, with owners “kitting out to sell” (on low finance) and when they won’t accept a cent less than that what they believe their improved abodes in their improved town are worth.
So, where’s hot if you want capital growth above all else? There’s always a bargain to be had, but if you want to narrow down, here’s a few of our thoughts on where to buy in or around Nice for capital growth:
Nice Promenade is always a contender. The apartments on this desirable strip will always do well. After all, there’s no new development that can be bought up on this strip, so what you see is all that is ever going to be available. Consequently, good ones for sale are ALWAYS snapped up quickly and rarely do owners have to lower prices (as long as they are not reaching for the stars in the first place). In September 16, we sold our “Sea View” holiday rental apartment. Owned for just four years, the owner still had a 10% capital gains tax to try and lower on sale. This was a relatively low value apartment at the €350,000 mark, properties valued higher, are likely to see capital appreciation of more than 10% in a five-year period. Two of the old fishermen houses on the Rue des Ponchettes on our holiday rental portfolio were bought around 2003 for approx. €700,000 and sold in or around 2013 for well over a €1,000,000. Though they earned good net annual returns whilst renting, they didn’t earn much more than ones bought for two thirds of the price. For these properties, the ROI was far more about capital growth.
There is currently just one of these fisherman houses on the market, you can see the property listing here.
Cros de Cagnes / St Laurent du Var is where I would spend if the lottery numbers came through. With the airport tramline going to Cagnes Sur Mer, the gorgeous array of new (and old) restaurants in the area, the quieter and more relaxed beach than Nice, and that you get so much more for your money, for me it’s a certain growth area. If you haven’t decided on location yet, pay this place a visit and check out our website pages for more information.
Nice Port will hugely benefit from the airport tram link, and bound to see prices rise, especially the short supply of amazing sea view properties. Prior to the tram, as good as these properties were, they were a pain to get to from the airport. 2018 sees all that changing. We see this the key area to buy in if you are an investor for rental annual return, but if many are scrambling over the available properties, then that is only going to raise prices.
* Two bedroom apartments in central Nice, bought for less than 1 million euros, have shown themselves to earn consistently for over five years over £40,000 GBP in net annual income to owners.Some years this has exceeded £45,000 GBP. Like all on our rental portfolio they are exclusive listing with Pebbles Rentals so no income is coming from elsewhere. Buying smart is about buying with most amenities, and for a return on a two bedroom apartment of over £40,000 you need a sea view. You can however make good returns without one. Ask us for more information about where and what to buy for the best annual return, whatever your budget.