A small but noticeable increase in confidence
In our market commentary at the beginning of the year we concluded that while there had been a reduction in transactional volumes, 2011 had seen a small but noticeable uptick in activity and confidence and the early signs in 2012 were for this trend to continue. Particularly in the ‘hotspot’ areas of Cap Ferrat, St Tropez and Provence.
Is this holding true at the halfway stage?
The shortest and simplest answer is ‘no’.
So what is happening and why?
Transactional volumes remain very low with agents making remarks such as ‘I’d be busier sitting on the beach for the next 2 months’ …. ‘this has been the quietest spring and early summer market in living memory’ and ‘thank God we have a rental and management business’.
It comes as no surprise that the culprits for this lack of activity are the ongoing problems in the Eurozone area. Uncertainty makes potential buyers ‘sit on their hands’ and until the Euro crisis is resolved one way or the other it is difficult to see confidence returning in any meaningful way in the near future. As one agent commented:
‘the Brits used to be the mainstay of the market, now they are an endangered species, almost extinct’.
There are willing Russian buyers in the market who concentrate on the traditional coastal areas but stocks of available property are limited; again keeping transactional volume low.
A gloomy picture
As we have said many times before the fundamentals of the South of France property market remain sound and there will undoubtedly be a cathartic moment when the ‘majority’ decide become active in the market again. We very much look forward to that moment!
But will it be the ‘minority’ making commitments to invest in the market over the coming 6-12 months who will be the long term winners? Who knows! Given that our ‘crystal ball’ is only as accurate as everyone else’s, it difficult to analyse especially with the added ingredient of Eurozone politics. Difficult and intriguing times.
What we do know is that it’s a buyer’s market with few buyers and ‘money’ is currently cheap
This will undoubtedly lead to a few adventurous opportunists taking the plunge. Perhaps it will be they who provide the stimulus for the much needed market catharsis. If history is anything to go by, this is the most likely outcome… it’s just a question of when.