Decrease of properties put on sale, drop of stocks, soaring prices : the Real estate Observatory of the French Riviera, in his third quarter of year 2000, sets off the alarm bell.
Prices that are shooting up until levels reached in the late eighties, before the market collapsed : real estate has been firmly increasing for two years. With this sharp acceleration since the beginning of the year, candidates to the purchase, as well as those who are just seeking a renting are confronted with a very rare offer, which inevitably goes with exploding prices. The last point of the Real estate Observatory of the Riviera which set up at the CCI in Nice, hardly offers further signs of improvement. Even worse : all the signs are in the red and it is forecast to be very difficult for everyone looking for an accommodation.
Only 3.000 new accommodations in year 2000
What about the shortage of the offer ? These are explicit figures : 3.000 new accommodations have been put on sale in year 2000 (forecast), whereas there were 4.545 in 1999. And if the number of property transactions will decrease in 2000 by 25% compared to 1999, it's not because the market is slowing down (3.802 sales of new accommodations within the last twelve months as against 4.980 within the twelve previous months). That's simply because of this important decrease in the offer of accommodations.
Another sign in the red : the stocks. By the end of September 2000, seven months of stock were registered (2.275 accommodations) in the Alpes-Maritimes. That was obviously insufficient. At the same period last year, whereas the real estate Observatory already set off the alarm bell, the stock was composed of 2.974 accommodations. Since then, it yet decreased by 23%. Real estate professionals keep on saying that the situation is all the more serious as the stock reconstitution delay is twice as longer in the Alpes-Maritimes as the national average, because of administrative and regulation constraints that have to be respected when someone decides to build. So all the conditions are put together to make prices soar, the Office says without beating about the bush.
The pressure is on Cannes and Antibes
If we get closer to the case and we compare the situation area by area, we realize that in term of prices, Menton is skyrocketing (the square meter costs almost 22.000 F) nevertheless it is quite stable compared to last year. Areas which prices increased the most in one year are Cannes (+10% to 15.857 F), Antibes (+11% to19.732 F), Grasse (+10% to 11.339 F). Those increases are much higher than the department average (+2% to 16.610 F).That's the influence of Sophia Antipolis.
As far as the level of stock is concerned, Cannes and Antibes areas are the tightest with a stock of barely 6 months. It is noticed that the volume of accommodations put on sale in the Cannes area is going to decrease compared to 1999 (-23%). The result of this will be, here again, a decrease in sales of some 18% in year 2000. 'The situation is even more fraught in the urban area of Antibes (10% of the market) where we could easily witness a collapse of the offer, with as well a heavy fall in sales of new accommodations (-68%) and a very short selling delay of six months only'.
In the Cagnes-sur-mer area (13% of the market), accommodations put on sale are going to increase in year 2000 as well as transactions (+16%). But there are only five months of stocks. Whereas in Nice (29% of the new accommodation market), lodgings put on sale are going to noticeably decrease (-28%) with a sharp slowing-down of sales (-14%).
Just like in the Silicon Valley ?
What about the old accommodation market ? It accounts for the majority of transactions on the French Riviera. But the office indicates, “ as the new lodging offer becomes in short supply, and as credit rates are increasing, we can notice the first results on the old accommodation market, as it was expected.
A recent report of the Capital magazine (on M6) about the Silicon Valley gave us a cold back. Within five years, the real estate situation has completely changed. While in the United-States the accommodation prices were traditionally reasonable, with bigger surfaces than in Europe, economic expansion has created an incredible rise of prices. The smallest villa costs more than 10 million francs and the cheapest rents of the single studio flat start from more than 10.000 francs. The result of such an explosion of the lodging market is that the poverty line has risen to a monthly wage of 20.000 francs! Is the Telecom Valley of the French Riviera heading straight towards such a situation ?