The southwest, authentic luxury

Like butter croissants, wine and cheese, second homes are a French passion. In fact, there are 3.4 million i.e. 10% of the housing stock. Certain put it down to a tradition dating from the Ancien Régime, an era when it was fashionable to reside in Versailles but also have one’s château in the country. Others attribute it to the 1970s and 80s when the French government pursued an active development policy particularly on the Aquitaine and Languedoc coasts. Whatever the reason, the holiday home market is seeing a new lease of life. Following a downturn during the financial crisis, the market picked up and the number of secondary residences has never increased so much since the 1990s. According to a Crédit Foncier report, one French person in four dreams of owning a holiday home - especially young people.

The pull of coastal regions

The south-west coastal markets are ideal for second homes. Biarritz has 40% and Arcachon is not far off having 60%. People buy a premium location often with a view to living there full- time following retirement. The demand is nationwide with buyers coming from Paris and the Parisian region but also from the southwest (Toulouse, Pau, Bordeaux, Agen, etc.). Increasingly, they are arriving from the southeast, turning their backs on the Mediterranean seeking a better quality of life in the west where civil uprisings are not common. International clients are rare and, e.g. in  Biarritz, only account for 2% or 3%. They are mainly Europeans i.e. French expats looking for a base for their family members who are often scattered around the world.

In the countryside, the picture is different. In the Périgord, the British have set up home in villages; in Constant and Eymet they make up as much as 30% to 40% of the population. However, the 2008 financial crises forced many to sell up. For the moment, Brexit has not created too much movement and the demand remains international. The Péri-Pierres Immobilier agency gets a lot of clients from Nordic countries, as well as Australia and the USA. “Americans are connoisseurs of the region. They used to go to Bordeaux, so they did not come to Périgord by chance,” explains Anthony Dorlé, the agency’s Director. However, the generational effect does not work in the favour of rural areas. The older generation dreamed of owning a home in the heart of ‘la douce France’. However, as far as their children are concerned, France is just another destination. 

In large cities, it is a real scramble. In Toulouse, an enormous number of new European workers has been recruited by Airbus, Thales and Safran among others. This city now counts over a million inhabitants; that is 14,000 newcomers a year. Plus the city will soon have high-speed train links to Bordeaux. “In the heart of the Gironde capital, we’re seeing Parisians returning to live in their hometown. They hoped to live in Bordeaux and work in the capital but soon realised this was not feasible,” explains Olivier de Chabot-Tramecourt, Managing Director of the Mercure Group. “Generally in the southwest, our clients are 50% foreigners while this is around 22-23% in the rest of France. We’re also seeing an influx of 35-year-olds coming to buy traditional properties in stunning locations with a view to carrying out heritage restoration projects. It’s quite amazing. They used to represent just 5% of our sales but now it’s between 12% and 13 %.”

Bordeaux: finally, a slowdown?

The commissioning of the Paris-Bordeaux high-speed train line has transformed the Bordeaux property market. Prices went up by 40% in no time at all, a record in Nouvelle Aquitaine. Last year, prices began to slow followed, this year, by a stabilisation. According to data from notaries, the median value of an apartment is €4,420/m and €440,000 Euros  for a house.

Pierre de Luzan, Director of Mercure Bordeaux, saw a ‘wait and see’ attitude at the start of the year for luxury properties (i.e. €600,000 to €700,000). “Buyers are becoming more cautious, afraid they won’t be able to sell for the same price, he explains. This sharp slowdown had an impact on prices some of which fell. However, the market has started to pick up recently. The market can’t collapse as there is a constant population explosion.” Activity also slowed down in the first few months of the year due to the gilets jaunes who held violent demonstrations on the streets of Bordeaux creating uncertainty about the future. The trouble-makers often came from neighbouring departments - among some of the poorest in the country. Some were forced to leave the Gironde capital due to the rapid rise in the cost of property further fuelled their frustration. The perceived influx of Parisians who buy in the city centre forcing the local population to live fifty kilometres away is also not well perceived by some.

City-centre living

The most sought-after areas are in central Bordeaux i.e. the golden triangle (Allées de Tourny, Cours de l’Intendance and Georges-Clemenceau), Jardin Public, Caudéran, Chartrons, etc. For one million Euros, you will get a characterful 18th-century apartment (150 m2) in excellent condition with a similarly sized garden. For half that, you will get 80m2 in the Saint-Jean district (€5,600/m2). In the Middle Ages this historic neighbourhood was once home to the Palais des Ducs, sadly long gone. Later, Montaigne lived here and François Mauriac was born here. In Caudéran, the ‘Neuilly’ of Bordeaux, the dream of owning a holiday home surrounded by grounds is still a possibility. Part of Bordeaux since the 1960s, this neighbourhood boasts a golf course and green spaces, such as the 30-hectare Parc Bordelais. The most desirable type of property in Bordeaux is often a house with a garden that gets bigger as you move away from the centre. “As a rule, families moving to the city are looking for a home near to a good school with 250 m2 of floor space and garden of at least 100 m2. And for this you need a budget of between €600,000 and €1.5 million. In the Paris region, you’d have to double this,” explains Pierre de Luzan.

Village atmosphere 

In the metropolitan area, many small communities still retain a village feel with beautiful affordable properties priced at around €4,000/m2 - and even less. Le Bouscat with its typical shops is a favourite among Bordeaux locals. Buying a small property close to the tramway as an investment or pied-à-terre is a good idea. Villenave-d’Ornon, to the south of the metropolitan Bordeaux area on the left bank, is calm and residential. Close to the tramway and housed in a former biscuit factory, a renovated loft with a large living area opening onto a garden and swimming pool is being marketed for €525,000 (€2,560/m2) by Espaces Atypiques.

In neighbourhoods beyond the ring road circling a section of the city, the purchasing criteria is affordability, which is not always ideal. On the right bank, some areas are under development with bridges over the Garonne still under construction resulting in traffic jams. Yet an hour's drive away, you can find some real gems, such as a house priced at €500,000 with a swimming pool, stables and dovecotes. There is also a château listed as a historical monument with a vineyard. The asking price is in the region of two and half million Euros. In the kingdom of Bordeaux, a winemaker does not sell his vines cheap. 

The four Périgords

The four Périgords (black, white, green and purple) are dotted with fortified medieval houses, generally perched on rocky peaks, and châteaux. A true renaissance including Josephine Baker’s beloved Milandes. This is the land of prehistoric caves (Lascaux) and truffle farms. Picturesque and gastronomic, Black Périgord - the noblest of them all - welcomes three thousand tourists to Sarlat in summer i.e. three times its population.

The offer is attractive with reasonably priced properties: a 13th-century château just forty-five minutes from Bordeaux with a tennis court, swimming pool and outbuildings (€1,150,000); a renovated 17th-century Carthusian monastery with picture postcard views of the countryside (€995,000) or an 18th-century mansion with three hectares of grounds (€650,000). Finding a property with fifty hectares or even ninety is not rare. “These vast estates interest buyers with specific projects in mind e.g. to develop gîtes or conference facilities. We have a lot of these requests but few succeed as the hotel industry is a profession that requires considerable expertise” observes Anthony Dorlé. At the moment, the market is divided in two. Under €600,000, the market is stable with sales increasing and prices holding steady. However, above €600,000, demand is lower than supply. Negotiations are intensifying, and values are starting to decline.

And the future? “We’re seeing a transition. The focus will shift to practicality rather than ostentation. If you’re looking for a large property, you’ll need a large budget. Failing to find their dream property, some buyers prefer to build an architect-designed home in nature. Barns, practically in ruins but with a potential for modernisation, a view and a beautiful plot of land, are already in high demand.”

Biarritz, the star

The Basque country has its ‘Rock’ - Biarritz. You can still spot the odd royal relaxing by the pool of the Hôtel du Palais, the city's five-star hotel. In addition to its golf courses and thalassotherapy centres, the resort still attracts its fashionable people as in the time of Napoleon III and Empress Eugénie who welcomed Europe’s high society there. This golden age lasted until the Roaring Twenties and a luxurious, albeit mixed, architectural heritage remains notably around the Hotel. Prices in the neighbourhood are sky high: €10,000/m2 at the bottom end and considerably more for properties with prized ocean views. Average prices reported by notaries in Biarritz are higher than those in the Pyrénées-Atlantiques: €5,360/m2 for an apartment and €610,000 for a house. In five years, they have gone through the roof, 15% and 30% respectively, and they are still on the rise. “It’s becoming very difficult to find a house for €600,000 especially by the sea where prices are over a million,” explains Denis Peytouret (Biarritz Littoral Immobilier). “The best plan is to find somewhere in the vicinity of the Arbonne/Arcangues/Ahetz golden triangle, where homes start at €600,000 but you really need to budget from between €800,000 to one million Euros.” At the top of the list? An old neo-Basque farmhouse with a double sloped roof, cathedral living room and exposed beams. Biarritz Littoral has one on its books just twenty-five minutes from the coast priced at €640,000. 

The city centre around the Place Clemenceau is also a good bet (€8,000/m2). “Lifts, balconies and garages are pretty rare in these 19th-century properties. Beyond going everywhere on foot, these are among the key purchasing criteria," explains the agent. Currently, the agent is marketing the Milady development near the Basque coast. This off-plan development includes many features prized in Biarritz i.e. panoramic ocean views, rooftop terraces and large living areas (€8,000 to €10,000/m2). Recently, the management of the Hôtel du Palais has been entrusted to the Hyatt Hotels Corporation. This is the third major French hotel to join ‘The Unbound Collection by Hyatt’ following on the heels of the Hôtel du Louvre in Paris and the Martinez in Cannes. The expertise of this Chicago-based group should increase the number of wealthy foreigners, which in turn will boost the demand for high-end properties.

Attracting the in crowd

Like Biarritz, this coastline has its fashionable crowd. Frédéric Beigbeider bought a property in Guéthary when Vincent Cassel, Guillaume Durand and Anne-Sophie Lapix - who is from Saint-Jean-de-Luz - started becoming regular visitors. Celebs can remain incognito here: the Basque and Landes coastlines are not at all flashy like the Côte d’Azur. The real estate market is booming however. A while back, an exceptional property in Bidart on the hillside overlooking the ocean was put on the market for ten million Euros by Sotheby's real estate division. Villas are close to the five million-Euro mark. And in this outstanding market, Guéthary is even more expensive than Bidart. 

According to Serge Pilke, whose agency Terres & Océan operates in Biarritz and the surrounding areas as far as Hossegor, “buyers are looking for something on this coast, which is less urban than Biarritz, so a villa with a garden in walking distance of facilities or a bike ride away.” Since 2016, there has been considerable pressure on prices. Notably, the agency sold a large villa for €12,000/m2 in the Anglet neighbourhood close to the Chiberta golf course and has concluded several transactions of €9,000/m2 in Hossegor including a villa in need of work. Since then, a high-speed train link has shortened the time between Paris and Bordeaux.  The region is becoming more and more sought-after yet we have fewer properties for sale,” explains the agent. “This phenomenon could continue until the market overheats leading to a shortage of properties, as well as seeing owners overestimate the value of their properties so much that they can no longer sell them.”

Toulouse is booming

In Toulouse, average prices reported by notaries are much cheaper than in Bordeaux: €2,610/m2 for an apartment. A house will go for €347,000. The increase remains between 5% and 8%. However, the high-end segment is performing extremely well in the city centre at €5,500 - 5,800/m2 supported by strong demand from newcomers to Toulouse. “The trend is very positive but we’re starting to see property shortages. There is massive overbidding on good properties, which have already increased by 6% since the beginning of the year,” explains Martial Vigier, Director of Eurim Toulouse. In the centrally-located Saint-Étienne neighbourhood, the agency has just sold a highly sought-after property for €850,000: a 3-4-room apartment (103 m2) on the top floor with a balcony and garage. Lifts are a rare commodity as the buildings did not enjoy the golden age as in Paris or Bordeaux. Opulence only broke through in the Middle Ages with the production of blue dye from woad, a plant which was later replaced by Indian indigo. Fortunately, history has reversed itself. “The largest order ever recorded by Airbus came from an Indian company called Indigo,” smiles the Toulouse agent. In the central Carmes neighbourhood, a beautiful private house with two pretty turrets is on sale for 2.1 million. Negotiations are ongoing as the bathrooms and kitchen are in need of renovation. The Côte Pavée, where the mayor of Toulouse lives, is popular thanks to its houses. Websites specialising in real estate valuations, estimate prices in the region of €5,800/m2 at best - a third more than for apartments. The presence of good private schools, such as the Lycée Saint-Joseph, is an added extra. Currently, the neighbourhood does not have good transport links but initial work on a third metro line has started. Among the offers, a family home (400 m2) with a roof terrace overlooking the Pyrenees is on sale for €1,390,000 but it will not be on the market for more than three months: everything is going very quickly in Toulouse.

Opportunities

In the areas surrounding the Occitane capital, the market is not as buoyant as in the city centre. As in many rural areas, young people are not interested in owning large properties requiring costly maintenance. “In these conditions, prices can fall by as much as 50% and there are bargains to be had,” reports Martial Vigier. For example, a well-constructed castle for sale in Lisle-sur-Tarn, halfway between Toulouse and Albi, with seven bedrooms, a pool house, a swimming pool and views over Tarn’s vineyards. The property was on the market for 1.2 million but was reduced to 800,000 Euros. The owner is willing to take 700,000 Euros.

On the other hand, investments are on the up. Parisians will not hesitate to buy a three or four-room property with a yield that is 4% to 6% higher than most other investments. The most desirable neighbourhoods are Busca, Jardin des Plantes and Les Carmes. Large buildings between two and four million are very popular and can be sold in a week if priced right.

The future of the real estate market is looking as rosy as Toulouse itself: “We’re fortunate to be surrounded by plains, which means that it’s easy to build outwards,” explains this Toulouse local. “Our businesses are among the most efficient in Europe and we regularly welcome employees earning $300,000 a year, who drive a company car and who have ample means to acquire the best our country has to offer. Of course, the risk of a housing shortage is present but private developments can mitigate this. On the banks of the Garonne, new quality developments are selling well, often at over €10,000/m2 with a good resale price.”