Within a short flight from most European cities and surrounded by an unbeatable combination of beautiful beaches, vineyards, and ski slopes, property in the South of France, particularly its southwestern region, has always held a special allure. An allure that, all the real estate insiders we spoke to agree, has largely remained untarnished by the pandemic.
Those insiders include Michael Baynes, cofounder and executive partner of Maxwell-Baynes Real Estate; Nicolas Descamps, president at Côte Ouest Immobilier; and David Bilder, founder and CEO of David Bilder Real Estate. Here, they share their knowledge of the trends in their respective markets, how their brokerages have adapted in the wake of COVID-19, and their outlook for this quarter and beyond.
Activity in the real estate market came to a halt during the French lockdown from March to June 2020, leading to mixed results for brokerages’ turnover, when compared with 2019. However, for both Côte Ouest Immobilier and David Bilder Real Estate, the results are optimistic.
“Last year was a good year for us and we expect to maintain the same turnover in 2020, even with the three months that we weren’t able to work,” says Descamps of Côte Ouest, which has agencies in the French Basque areas of Saint-Jean-de-Luz, Biarritz, and Guéthary. “We’ve had good activity since the end of May—perhaps even better than in previous years. This is mainly for two reasons: people who were waiting to complete their purchase did it all at the same time when lockdown lifted, and we’re still in quite a good market in the South of France. We’ve seen prices maintain their high levels, as a result of a high demand for a limited number of properties.”
Bilder also expects to maintain, or even exceed, last year’s results. He points out that in 2019, for the period from June to July, his brokerage made six sales, with a turnover of €160,000 ($187,000). For the same period in 2020, it made four sales and achieved a turnover of €260,000 ($304,000). “I believe this is because our market in La Baule-Escoublac has seen a different type of client,” he explains. “They are now more likely to be Parisians or Londoners, and therefore seem to have more purchasing power.”
“We saw an enormous number of inquiries during lockdown,” says Baynes, “but, due to travel restrictions and market uncertainty, this hasn’t translated into sales across all our segments. While sales in our coastal and city markets are not significantly different to a normal year, and we have seen some increase in the sales of countryside properties, we’ve seen very little movement on vineyard transactions. However, we anticipate a stronger end to the year.”
Increased Domestic Activity
All three real estate professionals agree that the pandemic has given rise to a number of new trends in southern France’s real estate market, not least those caused by travel restrictions.
“We saw a lot of interest from those elsewhere in Europe,” Descamps says, “but with the introduction of quarantine periods it has become increasingly complicated for potential buyers, especially for those from the United Kingdom, to travel to France. Most of our recent transactions were done with French locals.”
Baynes has experienced a similar trend—“our transactions have been more domestic in focus given the travel restrictions,” he says. As a result, he points to a boom in the new ways that buyers choose to view homes. “We’ve seen an increase in video visits via smartphones, as well as decisions being made without any visits at all. In fact, we’ve had two recent sales where the buyers, who both live in France, haven’t visited the property. They based their decisions on our marketing videos, as well as brochures and photographs. It’s certainly an unusual new trend, as in the 10 years leading up to this point, we’ve only sold one other home in this way. To do two in one year is a major statistical shift.”
The inability to hold viewings during lockdown, and the socially distanced home tours that followed, have also led to new innovations. “We adapted by making videos of the properties and holding more viewings via Zoom,” Descamps says.
For Bilder, virtual platforms such as Matterport have been a game changer. “We’ve set up 3D visits through the platform, and have also made use of their remote measurement technology,” he says. “It’s a real timesaver in decision-making, and means that less physical visits are necessary between the sale and its closing.
“For example, an older couple recently bought one of our beautiful villas, but they live 310 miles (500 km) away from their purchase. Using virtual technology, they’ve been able to take measurements for the many pieces of furniture they have, and have even made the decision to sell some pieces they no longer need to an auctioneer at Christie’s. So, as we say in French, la boucle est bouclée, the circle is complete.”
Escape to the Country
“There is a new group of people who have specifically been associated with the COVID-19 season,” says Baynes, “and that is people who have been considering a move to the countryside, and the pandemic was the motivating trigger that made them think, ‘Life feels a little fragile right now. I’ve always had a dream of having a country house in France, now is the time to do it.’ Which means that we’ve seen a number of motivated buyers in the market for country homes.”
“Because homes that are close to the ocean have sold so quickly, we’ve found that people have been happy to go a little bit further inland with countryside properties,” Descamps adds. “And, people are also a little more interested in good-sized plots, with a garden, pool, and maybe a bigger house than they once expected to buy.” Bilder agrees: “There’s been an increase in demand for properties with gardens and exterior space, and so we are seeing more interest in villas and less in apartments.”
“These are properties that are not necessarily rural or in the middle of nowhere,” Baynes clarifies. “They have good access to airports and roads. But they are set apart, they’re not city properties, and they certainly have privacy and security. They are especially appealing to those who have realized that they will only need to go into a physical office environment every couple of weeks. Bordeaux is a quick flight away from London, so the possibility of working from a countryside home has opened up dreams for people that were previously impossible.”
He cautions that it’s a trend that seems to have made a greater impact on properties priced €500,000 ($585,500) or less. “I know there’s been a mini boom in that sector of the countryside market, but at Maxwell-Baynes our sector really starts at €700,000 ($819,700) and above—what we would consider the French luxury market. In this portion of the market, there’s something of a stalemate: wealthy homeowners are in a position where they don’t necessarily have to sell at this time, and buyers are waiting to see what the market does. The net effect has been price stability.”
When it comes to smart investments in the region, Baynes singles out hospitality. “The South of France will always be a favorite tourist destination—particularly the areas surrounding Bordeaux and Dordogne, where wine and food tourism is already so strong.
“We have quite a few hospitality properties listed, and always do. Most of these properties fit the chambre d’hôtes or bed-and-breakfast profile, which offer five bedrooms or less, and we’re seeing two approaches to these from buyers. The first is counter-cyclical thinking, where people are taking the opportunity to invest at a time when the market is slightly weaker, with future opportunities in mind. The second is those buyers who have decided to leave their cities as a result of the pandemic, and are looking for a business to run in the countryside. Hospitality is the obvious target, because the tourism industry here is so well established.”
For Descamps, it’s his region’s surroundings that hold evergreen investment appeal. “The French Basque country offers incredible natural surroundings, with well-preserved countryside, some of the best surfing and fishing in Europe, the opportunity to go hiking or climbing and, in the winter, it is just an hour and half away from ski slopes,” he says. Then, there’s also the wealth of culture in the area, with “a Basque influence on the architecture, language, and food.” And—for when the pandemic eventually recedes—a vibrant night life: “we are very close to the Spanish border, so you can enjoy tapas at 2:00 a.m. in San Sebastian, which is only half an hour away.”
The Rest of 2020, and Beyond
So, what’s the outlook on real estate for the remainder of this year, and into the next? “Currently it’s rather good,” says Bilder, “although, during August, we saw a sharp drop in demand for luxury goods. This could be because our affluent clientele, who usually vacation in the area during that time, had spent the March to July lockdown in La Baule and then returned to their city homes. However, we’ve since seen a good recovery that we believe will continue into 2021.”
“At Côte Ouest we’re confident that we’ll maintain our current growth,” says Descamps. “And we’d like to keep developing. We recently opened our third agency in the village of Guéthary. It is a small market, but it offers high-end homes that are very much in demand—some of the most expensive sales we have made in the past were here. It was a good opportunity and, based on that success, we are exploring the idea of opening more new agencies in the next year.”
For Maxwell-Baynes, a strong close to the year is on the cards too. “Since lockdown lifted, our city market has been gathering pace, more and more each week. And, once schools reopened at the beginning of September, we saw a small explosion of interest,” Baynes explains. “That, along with ultra-low interest rates, means we’re seeing a strong increase in demand for ‘real’ assets such as property.”