With rising tensions in North Korea, conflict in the Middle East and cold war jitters in Ukraine, there are no shortage of risks, but it is in every country’s and leader’s interest to reduce any further escalation. A more immediate concern in Europe is the impact of demands for greater sovereignty that has brought about Brexit, and the referendum in Catalonia in Spain this weekend. In the UK this has led to the first annual drop in property prices in London for 8 years, compounded by a 15% fall in the Pound against the Euro.
On the other hand, the heart of the European Union remains in steady hands with the re-election of Merkel and Macron’s win this year. In his speech this week before students in the Sorbonne Macron outlined an ambitious programme to re-dynamize the EU, by for example harmonizing tax on company profits to a lower level.
Top of the league as recognised safe havens for both political stability and security are still Switzerland and Monaco, with the bonus of a friendly tax regime, but also with the highest real estate prices (30 to 100 thousand Euros/m2 in Monaco).
Average Eurozone growth at 2,3% per year over the last 2 years has slightly outstripped U.S. growth.
Slowly rising interest rates to avert the next asset bubble are not expected to have a significant impact in slowing down real estate sales. In 2017 volume of property sales in France may hit an all-time record of 1 million transactions.
Investors from China, the Middle East and India are still expanding their property portfolios in Europe and the US, now focusing in Europe on countries within the Eurozone, such as hotels in Paris, or vineyards and properties in the South of France.
Risks from Natural disasters
After the September hurricanes hitting the Caribbean and earthquakes in Mexico, extremes in weather patterns must be more carefully considered. For anyone buying a sea front property, or a home on an island, it would be safer to ensure the main rooms of the house are several meters above sea level, as worst case scenarios for global warming estimate a 2 meter rise by the end of the century.
For the first time mini tornadoes have occurred in Europe, with more frequent and intense flash floods or droughts in certain areas. This year in the Var, there has been only 2 days of rain in the last 4 months, so it is surprising how well lakes in the Alps have helped avoid water shortages.
So is French Riviera real estate a safe haven ?
Yes, as in times of greater uncertainty, when fear of sudden declines in asset values exceeds the appetite for high returns, property investment is an excellent choice. Unlike shares, property is more recession-proof, is easier to control and understand, and has a tangible value as you can always live in it.
And taking account of the importance of a good location when investing in property as well as all the above ongoing trends, buying a villa in the South of France is a sensible choice - there are no hurricanes to worry about here. There are also many opportunities to renovate houses and turn a hobby into a profitable past time.
At Smartfinder Home, we will be delighted to share with you some gems that we have found, waiting for an owner !
Photo by NASA/NOAA GOES Project via Getty Images