The Irish Times reports..
FRENCH PROPERTY: . . . but they can sell without making a loss according to agents on the Riviera
MANY IRISH people who flocked to the Côte d’Azur in the noughties to buy apartments and villas in the sun are now selling up – but still making a profit, according to estate agent Bernie Ennis.
Irish people under financial pressure at home are trying to release the equity they sank into second homes on the Riviera. “I get calls from people asking me to get an estimate and to do the paperwork in case they are going to sell,” says agent Hilary Larkin. “Then a few weeks later, I’ll get a call asking me to go ahead and sell.”
Agents like Ennis, of World Homes Investments in Dublin, sold apartments and villas on the Riviera as prices rose between 2000 and the peak in 2008, many by as much as 70 per cent. They have fallen since then, but not by much more than 10 per cent, according to Ennis.
Ennis believes that even after paying notary fees and capital gains tax (25 per cent for Irish residents), buyers should make some profit: many buyers only got 80 per cent mortgages because of strict French lending conditions, so most should recoup their 20 per cent investment along with the increase in capital value.
“We just sold a property in Nice last week for a client who purchased from us in 2003 at €273,000. At peak in 2008, the property was worth €520,000; last week we sold it for €485,000, an increase of 78 per cent – and it was on the market for only five weeks.”
The French property market has proven more stable than others in the world recession, partly because of France’s lending rules. And the Côte d’Azur is one of the most stable French markets because of its popularity with holiday homebuyers around the world. Some locations along it – like the Croisette in Cannes – are fairly impervious to price cuts.
The main market for sales are buyers from the north of France looking for holiday homes, with Italians beginning to come back into the market. Two to three months is the average time it takes to sell a property, says Ennis.
Ennis says she has not, however, had demands for resale of sale-and-leaseback properties: most leases run for nine to 11 years, and most Irish buyers would have bought into such schemes since 2000.
Ennis – who sold a number of leaseback developments in the early noughties – says she isn’t handling resales in this different and difficult market now, but may in the future.
Hilary Larkin of Hilary Larkin Properties, based near Cannes, is another Irish agent who has now switched mainly from selling French holiday homes to re-selling them for mainly Irish and UK buyers. Prices have risen, then fallen, she agrees, but location and other factors determine by how much: Irish people who paid over the odds when the Irish market was at its peak around 2006 may find the value of their property has fallen more than 10 per cent. And many clients she is dealing with are philosophical. “I had one Irishwoman’s property up for sale in Nice, and we had to reduce the price. She said: ‘Do what you can – if I take a hit, so be it – if I didn’t have the apartment, I’d have nothing, because I’d have put the money into bank shares’.”
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