Tales from the Front Line

Damned Statistics

by Stuart Baldock
on July 28, 2010 in Buying in France

The well-known quotation about lies and statistics has never been more relevant than when trying to decipher commentary on the French property market. No-one really believes us when we say there are no reliable numbers to show if the market is going up or down and in what proportions. This is especially incredible to Anglo-Saxons, used to being able to obtain accurate information about almost everything.

Statistics are available. The problem is that they come from different sources, using different parameters, often reflecting what the author wants to prove rather than reality. Individual agents have far too small a view of the market to be a valid source, and the kind of multi-office agencies found, for example, in the UK just don’t exist. There are several professional organizations, the best known being the FNAIM (French Real Estate Federation) and many franchises such as Century 21 and ORPI. There are also the Notaries, through whom virtually all transactions must pass.

The FNAIM asks its members to provide statistics, but it is not obligatory. It is obligatory for agents who wish their property to be listed on the main FNAIM website – but so few potential buyers consult it that agents are not motivated to provide the information. The result is that only 5 – 10% of overall transactions are available to the statisticians of the FNAIM. Too small to count, really. The other professional bodies are even less representative.

Franchisees are again encouraged to upload details of transactions to their administrators – and this is one source of statistics but again it is too small to be meaningful. Often these statistics are not qualified: unusual transactions (outstandingly high value, or property in need of total rebuilding, for example) may be included in the overall averages, thus skewing the statistics. If there is a sudden ‘run’ on studios (which have a higher value per square metre than larger apartments) average value statistics may be false for that period.

The Notaries should be a good source and to an extent they are. The problem is that their statistics are at least three months behind the market (the average time from conditional exchange – for which no statistics are gathered - to completion) and don’t provide a day-to-day snapshot. Also their statistics are quite bald. It is not easy to know the condition of the property sold, which floor it was on, sunny or facing north… For houses it’s even more difficult to judge.

The only people who really know what is going on are the Property Registrars; they collect all the information – and the taxes – for the fisc. The fisc says it cannot provide statistics as everything comes jumbled together – residential, commercial, land…  It would just be too expensive to sort it all out and provide accurate statistics. However, when the taxman thinks he is due more tax because a transaction has taken place at an unrealistic price (and this is not unusual) he soon manages to dig out and analyse the requisite statistics! “Damned Statistics” indeed for the buyer who has his conveyancing costs hiked by 30% or his Wealth Tax reassessed!

History Lessons

by Stuart Baldock
on June 2, 2010 in Buying in France

Property Vision France covers Paris, Provence and the Alps as well as the Côte d’Azur. Best known of these, often called simply “the south of France”, the Côte d’Azur is one of the loveliest stretches of coast in the world, and probably the most expensive residential real estate anywhere. It’s sometimes hard to believe that the most desirable part of it (from just west of Nice to the Italian border) has only been in France for 150 years.  Previously it was part of the Kingdom of Sardinia and Savoy (along with some of the French alps!)

Those political and geographical circumstances were, in a way, responsible for Cannes becoming such a famous place to live over the last fifteen decades. The Kingdom of Sardinia extended all the way to the river Var at what is now Nice airport – an ideal natural frontier which halted the English nobleman Lord Brougham on one of his regular holiday trips down to the southern sunshine. The reason? Cholera. The outbreak was sufficient to turn Brougham and his retinue around and heading east they pitched camp in the first pleasant seaside village they came across. The name was Cannes, and the rest, as they say ….

Brougham was the first Brit to fall for the south of France. He loved it in Cannes, built a holiday home there, invited his chums, they too fell in love, built houses, and the first overseas property boom was born. On and on it went. The British were by far the most numerous property owners in the South of France (soon after Brougham’s first visit the Kingdom of Sardinia was absorbed into the fledgling state of Italy and the County of Nice became part of France). This happy state of affairs lasted for decades, punctuated only by inflows of pre-revolution noble Russians and, in the seventies, by buyers from the Middle East – principally Saudi Arabia.

It’s a very different story today. Not only have the numbers of British buyers diminished (weak pound, property prices becoming less accessible, other parts of the world beckoning) but the number of buyers from elsewhere has increased in staggering proportions. Northern Europeans have always been keen, although not usually big spenders, but now Russians, Ukrainians, Kazakhs, Brazilians, Indians, Chinese, Lebanese, Palestinians, Jordanians, South Africans, Americans, Canadians, Romanians and many more come – and buy. We at Property Vision have looked after well over a dozen different nationalities in the last few years. Including (still) some British!

Is the world shrinking? Are low cost airlines tempting more people away from their own countries? Or is it just the political and geographical coincidences which first brought Lord Brougham here that are now bringing the Rest of the World.....?

Silk Purses

by Stuart Baldock
on April 21, 2010 in Buying in France

You would be surprised how regularly we are shown lovely French properties for sale which are worth less than the sum of their parts. This is usually because someone set their heart on buying a country house, fixed a budget, but had no exact idea of where they wanted to be. Somewhere in the south was probably the only priority, and that’s where the trouble began.

Our hypothetical owner may have begun by cruising round the internet, amazed to see that just a few dozen kilometres could make the difference between something quite expensive and something really quite reasonably priced – on paper (or screen.) Click on something a hundred kilometres from where you first thought of and, wow, that’s really cheap, well below the budget, plenty left over to smarten it up. And that’s where the trouble really set in.

Having overcome the initial disappointments of visiting properties and realising that reality is not always quite as appealing as the pictures on the internet, our future owner suddenly fell in love. A very pretty house, with lots of land, a little neglected, and so much less than the budget! Sure, not quite such a prime area, but the sun still shines. A couple or three years later, though, the “smartening up” has grown to become the damp-proofing, the new roof, the Europe-compliant septic tank, the new electrics and plumbing, the double glazing and air-conditioning, the imported hi-tech kitchen, the minimalist bathrooms, the pale stone floors throughout – great fun, a super project, and all more or less within the original budget.

So – what’s the problem? The problem is that when we are shown the property by that owner for one of our clients we cannot justify the asking price. Of course if you add the improvements to the original cost, you can. The point is that the property, however lovely, never justified all those improvements and no amount of minimalist bathrooms will help it sell if it’s too far from a village, too far from the TGV station, too far from the airport, or just too far away from where people with that sort of money want to be. Look carefully at the ears before you spend too much on making the silk purse.

Make a wish

by Stuart Baldock
on February 3, 2010 in Buying in France

Not a good start to the year in the UK. When the weather’s not freezing it’s wet. When it’s not wet it’s snowing. There’s an election round the corner (and who believes that will change anything?), the pound is still down there in the deep dumps, and it’s time to face up to the taxman.

So, how about a wish?

Our task is making wishes come true and a very satisfying job it is too. Sometimes, though, even a real fairy godmother would find it hard to help some wishful thinkers. What’s their wish? Here’s a clue: “vineyard”. How many times do people say to us “What I’d really like is to escape and come and make my own wine”?

It sounds great. For most of the year you watch the grapes grow: not very strenuous. Then you invite all your friends for a long weekend and when you are all suitably lubricated by the product of previous years’ efforts, the grapes are plucked and crushed and go into the vats and the barrels while you settle down to another long period of inactivity.

Sure, there are things to be done in the winter. Pruning mostly, but that can’t be very complicated – just need a good pair of secateurs. Then bottling, well, most people get the specialists round to do that. Marketing? You must be joking – you spent most of your working life marketing things which are a lot less sexy than wine with your name on the label. In any case, the amount your friends drink means you’ll probably sell the entire stock to them. And of course you don’t want to make a profit; just cover the costs. Perhaps pay for the staff who clean and cook, and enough left over for the man who sits in the little shop at the gates to your Chateau, cheerfully selling case after case to the passing wine buffs.

You’ve guessed of course that it never works like that. If you want a wine-growing estate in the South of France you’ll have no trouble finding one. They’re all for sale, or nearly all. The problem is finding one with a really lovely house – because that’s what it’s all about. It’s great to have those rolling vineyards, the ever-changing views as the leaves turn gently from bright green to dark red, the indescribable joy of watching the grapes swell on the vines, and that fulfilling moment when you drink the first bottle. But there will be the occasional hailstorm just before you harvest, there will be some vile bug or disease which will decimate the crop just when you thought this would be the best year ever, and the chain of wine shops which signed up for a couple of thousand cases will go bust before you clear the cheque.

It’s a good wish. Just make sure you don’t need to earn any money from the venture – indeed, you’ll probably be putting more in year after year and wishing you’d kept that job in the City.

Train Spotting

by Stuart Baldock
on January 18, 2010 in Properties

The TGV is an amazing way to travel in France. The Trains à Grande Vitesse are capable of operating speeds around 300 kph and put Marseille at about 3 hours from Paris: a serious competitor to the plane. From Marseille eastwards, however, the situation deteriorates dramatically; the TGV takes another 2 ½ hours to cover the 250 kms from Marseille to Nice. Unacceptable to a lot of people who would prefer to go all the way by high-speed train rather than put up with the trek out to Orly airport and the interminable security and check-in controls.

The French authorities have therefore decided that a dedicated high-speed line will be built all the way to Nice, putting the fifth French city at about 4 hours from Paris. The burning problem, however, is where to put the track? Should it go through Toulon, Cannes, Antibes, allowing those important coastal towns to benefit from the new service? Or should it cut across the vineyards and picturesque countryside of Provence and especially the Var, directly to Nice? Or a bit of both?

NIMBYS abound in France as everywhere. The problem in the South of France is that the back yards tend to be hugely valuable. There will be compensation to a degree for those which are traversed by the TGV, but what if you buy a delightful residence within earshot? Unless you are a train spotter (and one TGV at 300 kph looks very much like another) then you may be a little disappointed.

We are keeping a close watch on developments.