Luxury Property Prices on the Cote D’Azur Crash
Villa La Leopolda - From E450 million to E30 million.
There have been lots of rumblings recently about the luxury property market on the French Riviera being immune to the down turn, but this seems not to be the case. In a region where $500,000 barely buys a tiny apartment, the downturn has hit and hit spectacularly hard. The withdrawal of Mikhail Prokorov from the purchase of Villa Leopolda for the almost-insane sum of E450 million signaled the beginning of a major crash in values. According to the Telegraph, that particular property would be unlikely to sell for much more than E30 million nowadays. Alexander V. G. Kraft, Chairman and CEO of Sotheby’s International Realty said:
The prices are coming more in line with the rest of the market. Trophy properties will be more in line with ‘normal luxury properties’ – about 20 to 30 million. For trophy properties it used to be a question of how much someone was willing to pay. They would come quietly onto the market – they would be marketed under the table. This system really has totally collapsed. Buyers willing to pay anything like those sums just don’t exist.”
This is certainly in line with the gossip along the Riviera. Discounts of anything up to 90% on the trophy properties – what few are selling, and 60-70% discounts on the more realistically priced properties. One Russian seller took E1 million for a property he paid E3.5 million for just last year. Property prices on the French Riviera have been falling for some time and sales have all but dried up in the luxury segment. France always lags behind the rest of Europe, but they eventually catch up. The Cannes film festival is shadow of it’s former self, with parties cancelled and hotels offering shorter than 10 day stays – almost unheard of until this year. And the Monaco Grand Prix is in all sorts of trouble this year, with corporate bookings evaporating and harbor berths available. Well, not any more – yesterday was your last chance to berth. Normally it is all but impossible to get a trackside table at one of the cafes. I might even take a peek myself this weekend.
EDIT – Having now spoken directly with Mr. Kraft of Sotheby’s International Realty – It would appear that the Telegraph fabricated this quote and Mr. Kraft said no such thing about La Leopolda. I have written to the Telegraph asking where this quote came from and will make a new post once I have found out. What Mr Kraft actually said is this:
There is still interest and offers are being made. Exceptional properties like Leopolda, which is one of the world’s most beautiful homes, will always sell for a premium. But those who bought at the top of the market aren’t prepared to take a 50 per cent hit.
Sotheby’s actually had an offer of E150 million which was rejected. I am a little unsure why on earth the Telegraph would fabricate a quote. We shall see.
Filed under For Enthusiasts by 
Leave a Comment
Comments on Luxury Property Prices on the Cote D’Azur Crash
Hello Mark (and all),
Being part of the first MLS in the region with some 400 agencies, I would agree that the numbers of large properties that remain unsold seems to swell. On the other hand, sales of properties at less than 800 k € is doing quite well. One of the reasons is that more and more people in those price brackets are stuck with double mortgages or other dire financial straits and ask for reasonable, and often agressive prices. I think that properties in the 1-3 million € are next since prospective foreign buyers are waiting for good deals. Higher end properties will probably be the last to pick up, but the market here is not as hurt as in many other places. For one thing, the French Riviera remains a highly desirable place, and for another, French laws guarantee safe title and the avoidance of pitfalls such as those in Spain, North Cyprus or Bulgaria, to name a few. As always, I remain optimistic…
As for the Grand Prix, I have been working in Monaco the entire week and can give you an idea of prices. There are still grandstand tickets in about two thirds of the tribunes (unheard of) from 450 € to 270. As far as track side restaurants go, here are 4 quotes I got this week: Venezia pizzeria at the end of the grid and Ste Devote turn: 500 € for race day. Tender to… in the “virage du bureau de tabac” : 1,200 €. Restaurant of the club Nautique of Monaco, in the straight between old chicane and bureau de tabac: 500 € for two days, Saturday and Sunday. Tip Top restaurant, next door to the famous Rampoldi in the straight between Mirabeau and the casino square: 500 €. All four places still had available places. Those are direct quotes to me. Otherwise, supposedly, a lunch of the roof of the Rascasse will cost you 10,000 € and 17,000 € in the Hotel de Paris !!!!
Cheers,
Renaud
Hi Renaud – thanks for the comment. Yes, I agree that the Cote D’Azur has not yet been as hard hit as other places and to be fair probably won’t be as hard hit as places like Dubai and the other European countries you mentioned. It is fair to say the current financial issues took a little longer to arrive in France. What has been playing out in the US for the last two years is only just beginning here. I do actually live here are I cannot remember the last time you could get a less than 10 day stay in Cannes during the film festival. That is interesting about the track side seating. And yes – almost unheard of for these prices and availability. I am optimistic in the long run, but I feel there is still a correction taking place on the Riviera.
See you at the Hotel de Paris on Sunday?
Hello Mark,
I tried to send you a messsage twice using the direct contact form but was informed twice that it was filtered out as spam.
Please be kind enough to send me a small note at RivieraHunt@Gmail.com sothat I can send my mail to you directly.
kind regards,
Renaud
Hello,
Since you have referred to the article posted on the ‘Telegraph’ ,15th may, I believed that the statement made there cannot be true.
This is in reference to the article posted on 21st may by the same agency about the real estate prices in Cote D Azur on 21st May http://www.telegraph.co.uk/property/5362283/Property-overseas-chill-wind-on-Cap-Ferrat.html
When i first read the earlier article, I didn’t want to respond as I knew it has no truth in it and the prices falling down so drastically cannot be possible for such premium properties.
I was sure that the statement has been misinterpreted and been published.
I am an enthusiast and that is why i took my time to let you know the fact. And as an ethical blogger I don’t support any content that are not verified or authorized.
How can one publishing unit contradicting to their own statement.
Blog are becoming an influential medium like the main stream media. But we as bloggers should create the difference in, referring, aggregating, commenting on the ‘clean content’ and making the blogosphere pollution free.
As a real estate enthusiasts, i look from the markets view as such info might cause a lot of damage to the buyers , seller…it is a ripple effect you know
I would like to follow you on twitter.
Ethical blogger? Prices can not fall? Where is your blog exacttly? Repute online solutions?
Sorry – what are you talking about? Property is like any other commodity – it goes up and down in value.
Alexander V. G. Kraft, Chairman & CEO, Sotheby’s International Realty France – Monaco:
This article is completely inaccurate and does not reflect at all any comment I have ever made. I have never directly talked to the author of this article, and I have neither checked nor authorized any of the “quotes” from this article. I have never made any comment regarding “Villa La Leopolda”, its purported sale or potential worth. Please delete this article from your publication.
My comments regarding the current real estate market on the French Riviera are now accurately reflected in a new article published by “Daily Telegraph” on May 23, 2009:
http://www.telegraph.co.uk/property/5362283/Property-overseas-chill-wind-on-Cap-Ferrat.html
Hi Alex,
I was just reporting “According to the Telegraph,” and linked to the article where they claim to be quoting you. If they fabricated the quote, I will happily edit this article to reflect that.
It will also make an interesting post as to why the Daily Telegraph would wish to misrepresent you in this fashion.
Perhaps you would care to be interviewed about this?