Real estate in the Alpes

“The production of housing is insufficient and has been for ten years. With the context that we know [inflation, hausse des coûts de l’énergie, des taux d’intérêt, baisse du pouvoir d’achat…], there is reason to wonder about the future.” Cyril Messika, President of the OIH Côte d’Azur sets the tone. From a distance, with +15% in existing transactions and +13% in new offers in new buildings, one might think that all is well. However, many building permits are pending (appeals from local residents and other associations are raining down), the stock of new homes is 3,454 (compared to 5,000 for a so-called “healthy” market) with a flow rate of less than 6 months , compared to 12-18 months in the “usual” period.
Not to mention the rising prices: 36% of sales in existing buildings exceed 5,000 euros per m² (only 25% last year), a percentage which reaches 82% in new buildings. With selling prices on average around 6,341 euros per m², an increase of +11%.

The elect in the dance

United around the president of the CCI NCA, Jean-Pierre Savarino, the federations of promoters, construction, real estate, GRDF and EDF want to remain positive. “A letter was sent to elected officials to make them aware of the work provided by local actors, in line with the Manifesto of the Côte d’Azur Real Estate sector launched last year. [10 enjeux et 50 propositions pour un territoire intelligent et durable, ndlr]” We are talking about cleaner buildings, verticality, thoughtful arrangements to attract active people and encourage young people to stay on the territory… Jean-Pierre Savarino to wave the flag “collective expectation” to avoid acting after the battle.

“We must dare to reinvent the housing market”

Pascal Pérez, economist and author of an essay Debt is not salty published in 2017, sheds light on the worrying housing situation in the Alpes-Maritimes.

What are the causes according to you?
The current situation is ugly but it suits many players: landowners, lenders, developers, general contractors, material suppliers… Demand is greater than supply and macroeconomic policies are keeping it high, c is “whatever it takes”. They neglect to change the offer because in the end, the political blow would be too high or because the industry has to be shaken up. We are witnessing a general inertia that drives up prices and not quality. We also know that the injection of money supply benefits everyone but that it mainly fuels real estate demand in exceptional areas such as London, Paris, luxury or exceptional tourist areas such as the Côte d’Azur.

Any solutions to restore the situation?
We must dare to reinvent the housing market, change the organization of the market which is largely dependent on public decisions. There are examples to be taken abroad, such as better guarantees for owners to avoid the drama of entrenched tenants. Create collective accommodation for families without resources, for seasonal workers… Selling accommodation to be rehabilitated with the obligation to do so with an architect allows access to property for low-income families. But macroeconomic factors can somewhat reduce the rise in prices: less credit to individuals with the rise in interest rates and the tightening of credit, less household savings capacity with inflation and perhaps less migration in PACA due to climate change…

Real estate in the Alpes-Maritimes: why is it stuck?