“Sotheby’s International Realty in France and Monaco currently has 30% to 35% more American clients than in 2012 and 2013.” – Wall Street Journal, March 5, 2015
“Changes to tax laws and the departure of Russian money have helped make the Côte d’Azur more affordable. . . . Estate agents report a surge in demand for its property.” – Financial Times, May 15, 2015
“The Muskoka Region [Ontario, Canada] is the world’s second-fastest growing recreational real estate market after Côte d’Azur, France, according to Christie’s International Real Estate.” – Bloomberg, June 24, 2015
These are heady days in the French Riviera. Apparently.
A few things are for certain: In recent times the Côte d’Azur has been the leading, year-round European destination for Russia’s elite. But nearly a year ago invested communities here – from top-end restaurants and bars to estate agents and private airlines – began worrying. Continued sanctions against Russia meant their commercial gains would go down the drain.
Last August, after chewing over the situation with Philippe, I’d jotted these notes for my files:
“This Russian wave isn’t the first one, and today’s influx won’t be here forever. In the late 1970s, it was the Arabs. Next wave will be the Chinese or Indians. . . . Property will go up and down in parallel with waves of purchasers – or is the Cap d’Antibes like central London and the price never really falls?”
And then, a few months after I scribbled these words, the ruble crashed. Au revoir to the latest Russian tidal wave.
The heralded changing of the guard in the Côte d’Azur means that the property market remains as buoyant as ever. That’s what the international headlines want to imply, anyway. So just before my family returned to Antibes this summer, Philippe rang Sabine, our property manager and the effervescent agent who sold us Bellevue nearly a decade ago. She has been selling property on the Cap d’Antibes for 23 years and, recognized locally for her colourful sense of fashion, she knows everyone and everything that goes down in this place. Philippe rang her simply to check in.
C’est la catastrophe! Sabine said down the phone line. She lives life in hyperbole. I imagined dramatic undulations in her rich, tenor voice.
Of 35 exclusive rental properties on the Cap, she said, only 10 were rented out so far! Je n’ai jamais vu ça! Not ever before! The Russians aren’t coming! The ruble’s down 50% against the Euro. They’re saying I need to cut my prices!
The Russians – to be clear, the super-elite of the elite who hail from that enormous country – matter to Sabine. They matter to everyone around here. In addition to upping property prices, they lent a certain, unmistakable sheen around town. One local friend mentioned how this crowd drank terrifically expensive Petrus champagne mixed with Coke.
That beverage, it should be said, is considered far more blasphemous here than the Côte d’Azur’s own rosé piscine: a glass of rosé wine with ice cubes.
My latest story comes from Christie, a Kiwi friend who has lived in the area this past year. Her daughter attended a Russian ten-year-old’s birthday party that took over Plage Keller,
a popular Russian beach hangout on the Cap d’Antibes. Of course there was the requisite DJ and disco with dry ice machine. There was a full-on fireworks display, a flame-thrower on stilts, and a 100-metre blow-up slide that extended into the Mediterranean bay. There was even a mosh pit: kids congregated under a sprayer that shot foam seven feet into the air, before it tumbled down again on the little revelers and turned them into an enormous foam heap so that, as a parent, you couldn’t see your child anymore and entertained worries of suffocation – until one by one, the kids would emerge from the mess and run to dip themselves in the sea before coming back for more. It was, as Christie put it, like the best wedding ever.
Then there was the other Russian birthday party her daughter attended. The cake arrived amid great jubilation: Two cannons blasted fake, 500-euro notes over the crowd. It was raining money. The birthday party, I should mention, was for a seven-year old.
So went life amid the Russian elite. But others also have led that charge. In fact, the whole notion of the French Riviera’s summer season took root, in part, right here on the Cap d’Antibes in the 1920s, when the Irish-Americans Gerald and Sarah Murphy
assembled the Fitzgeralds, Hemingways and the like on these beaches and in these casinos, whipping up a champagne and absinthe-infused reverie that continued every summer-long until, as it happened, times took a tougher turn.
The Americans have had their day on this landscape, too.
So what now? Surely the Côte d’Azur is still the Côte d’Azur, and our little corner of this paradise – the Cap d’Antibes – remains the feted Cap d’Antibes, right? Surely, as the papers have been saying, the new French tax breaks and the decline of the Euro against certain Anglophone currencies have prompted a new British and American wave to surge in, right? Or maybe it’s the Asians’ turn? To help sort through the latest upheavals, Philippe and I invite the vivacious Sabine and her colleague Marie to lunch.
Sabine, as usual, has dressed to impress. Today’s get-up is a black velveteen maxi dress draped with an open shawl, itself a hot pink, goldenrod and black patchwork of feathers, chains and Greek keys. She has cut way back on her usual half-dozen necklaces, but today’s selection has it all: a long chain affixed with tassels and metallic peace sign pendants in every shade of the rainbow, with an intricate beaded ornament dangling at the base. Her earrings coordinate, each bearing another peace pendant and twin magenta and turquoise tassels.
Perhaps by design, Marie wears a plain white, button down shirt and plain black trousers. (I come straight from a pilates class, and having forgotten a change of clothes, I myself am a true, fashion disaster.)
Eventually conversation turns to the property market. Over citron pressés and salades of roquette, crevettes and freshly marinated artichokes, one word again mixes into Sabine’s language: La catastrophe. Rental prices have plummeted 30%. Sale prices advertised in agents’ windows aren’t real; negotiations will hack off beaucoup of that number. The Russians are gone, and no one has drifted in to fill their ample shoes.
The Cap d’Antibes, we are learning, is not central London.
Property prices have hit EUR 5,000 – EUR 10,000 per square-meter, our agents estimate, depending on location, sunlight, and the sea view. That’s roughly US$ 525 – US$ 1,050 a square-foot. It’s truly catastrophic.
I mention the Financial Times article written a month and a half ago. What about the tax changes and currency fluctuations that supposedly stirred the pot down here?
Sabine is grateful that someone, somewhere, was drumming up the hype – but it isn’t at all true, she says, at least not here on the Cap d’Antibes. Marie explains the tax changes mostly benefit owners of primary residences – or else people who have bought to rent, and then only if they’ve never lived in the property and have owned it for at least 22 years. For owners of secondary homes, like most Russian, British and American homeowners here, there’s no big change – and still there are taxes to consider in their respective home countries as well. In short, the big French tax stimulus is no great shakes for this segment of the market.
Sabine shakes her and purses her lips. Only one large house has sold on the Cap d’Antibes so far this year, she says. It went for EUR 23 million.
What about DubyDubon? Philippe asks. A year or two ago, a German heiress listed this unique property that occupies something like its own peninsula at the edge of the Cap d’Antibes.
Sabine nods. A Russian bought it. The heiress was asking EUR 50 million, but who knows what she got. And anyway, that sale was more than a year ago.
These are hard times, indeed.
What about the Thai client you took around last summer? I ask. I sense that Philippe and I suddenly find ourselves responsible for unearthing any lifeblood that still flows through this market. I’d made notes about a Thai man who was interested in purchasing a villa in the EUR 20 – 30 million bracket. Perhaps, I’d jotted down, he was the forerunner to a new Asian wave?
Oui, bien sûr, Sabine says. He was interesting. He was jeune – young, in his 40s – and very, very wealthy. He brought three beautiful women along on his viewings, plus a British chauffeur who had no teeth. The chauffeur told Sabine she was only to speak to him, not to his boss. (Sabine, of course, told him she spoke to whomever she chose.)
The young Thai was interested only in villas that were pied dans l’eau – situated right at the water’s edge or, literally, “foot in the water.” Sabine showed him a neighbouring property to Bellevue; it was one of only two pied dans l’eau properties available on the Cap d’Antibes at that moment. The Thai called it un foutoir. An utter shambles. Sabine thinks he ended up buying somewhere closer to Monaco.
So with business faltering, how many real estate agencies are there in Antibes-Juan-les-Pins these days? I ask. I remind Sabine that when we first met, she quoted a figure of around 250 for the municipality. It seemed more than ample for its 75,000 population.
There are about the same number today, she says. It’s not all the same agences that exist – some last only a couple years here – but when one agence closes, another opens, and it’s often populated with young, enthusiastic agents who are new to this market.
And so the cycle starts all over again.
As for the Russians who have remained in the Côte d’Azur, I must relay that my Kiwi friend paused after her second retelling that evening of the EUR 500 note story at the seven-year old’s birthday party. Christie is hardly one to soften her words, so this idea was important.
I feel a bit badly for the Russians, she said. They get a really bad rap around here. There’s one couple we know who is wonderfully kind and generous.
The same is true in my court. Later this week, the H’s return to their villa across the road from Bellevue. They might be travelling here from Austria, but her roots are firmly Russian.
This summer season, though, I doubt the H’s refrigerator will bulge with the usual bowls of caviar, trays of lasagna, whole Mediterranean fishes and sides of beef. In the headier days my Austro-Russian friend needed food available at a moment’s notice.
You know Russians, she once told me. They call me and say, “Surprise, we’re arriving in 10 minutes!” – and they always expect a proper meal.