Languedoc:
A strong favourite for property investors
By Alex
Charles
September
2006
A recent Abbey
National survey showed that Languedoc Roussillon was the most popular area
for UK overseas buyers with the majority of those buyers intending to invest
between £50,000 and £150,000 in the project - and with good
reason.
The region
has continued to buck the French property price slow-down with consistent
monthly price increases of over 10% (as reported by property specialist
Creme de Languedoc) for houses and apartments. As these increases are
starting from a lower base than the more famous neighbouring Provence,
investors can still pick up a great property for considerably less than
a UK equivalent.
With millions
of visitors to the region last year, the second-home, rental or investment
markets are unlikely to disappear, even given the increased competition
from emerging Eastern European markets, due to the strong underpinning
by the tourism industry and local demand.
But will these
prices continue to rise? Well this is the million Euro question and
as ever the economics of ‘demand and supply’ will dictate this.
Nobody can be certain but there is a strong evidence to suggest that there
is still plenty of room for growth in this ever popular region and here’s
why.
Strong demand
- with the region consistently voted THE place French retirees want to
move to, Montpellier is currently the fastest growing city in Europe and
Hérault has just come 2nd in a detailed poll of the most desirable
departments of France to live in, there is no shortage of new blood moving
into Languedoc.
And this is
only the local demand, add into this equation the international factor,
and you have a very strong demand for property.
Great transport
links - the government has woken up to this fact and has been pumping millions
into the region’s transport infrastructure not only making it easier for
locals to reach the sunny Languedoc, but other Europeans too.
Languedoc is
served by five regional airports with a further five a short drive away
(most of which have direct flights served by budget airlines from many
Europeans cities). In fact Ryanair has recently announced the
opening of a new French base in Marseille with the addition of 11 new routes
and it is only a question of time before Beziers airport (located in
the heart of the region) picks up an international budget airline.
Road links
are being improved all the time. The new A75 auto - route linking Paris
and the north with the coastal A9 will soon be completed. This new road
includes the magnificent Millau viaduct which alone is well worth the trip.
Many other trunk roads are being improved and villages by-passed, shaving
hours off peak drive times.
It is not
just the roads that are improving, rail links to the region are second-to-none.
Paris to Montpellier via the iconic TGV will take less than four hours
and if you book in advance on the new internet only idTGV, tickets can
be found for an amazing €19 each way. The track has been ear marked
to be up-graded between Montpellier and Perpignan (date still tbc)
and the TGV link onto Barcelona is due to open in Feb 2009, cutting journey
times from Perpignan to just 50 mins. Also in the towns and cities, planners
have been busy improving traffic flow and provisions for parking and mass
transport. Montpellier for example, the regional capital, will open
its second tramline in December, with work on a third linking the city
to the airport starting soon.
Strong Tourism
- France is still the world’s top tourist destination (The Economist,
August 2006) with Languedoc the 4th most popular destination in France
(CRT Languedoc Roussillon 2004).
The Languedoc
boasts 300 days of sunshine a year and a pleasant Mediterranean climate.
With the varied landscape you can escape the heat of the coastal planes
for the cooler climes of the Hâut Languedoc and the foothills of
the Cévennes.
There are
over 200km of sandy beaches, dotted with an ever increasing number
of smart private beach clubs, or for those that prefer fresh water, beautiful
lakes and in-land river beaches. If you are a sun worshipper, you will
be spoilt for choice! There is also a wealth of activities and cultural
events on offer for visitors, ranging from any number of outside sports
(Golf, horseriding, walking, skiing, canoeing etc.) to historic
monuments, galleries (the newly extended Musée Fabré due
to open late 2006) and not forgetting the annual music festivals and
local Fêtes.
Is it all good
news?
It cannot be
doubted that the local economy is going through a period of significant
change, having to absorb the new arrivals and find them places of work
and new homes. For example in Montpellier developers are creating a whole
new area to the city, one that will boast the region’s first large 5 Star
hotel, purpose built hi-tech office space and stunning new housing.
But it
is the decline of the wine French wine industry that is presenting a particular
challenge to the local authorities. However one that they are
committed to meet with a desire to see land that has been scrubbed of vines,
re-used for tourism and local housing. This strong demand and government
backing is fuelling an increasing number of developments that are run under
a ‘lease-back scheme’. In order to boost the quantity of quality
accommodation in tourist hotspots, the French government introduced the
Résidence de Tourisme status.
If a new
development is granted Résidence de Tourisme status, a buyer
can purchase the freehold of the property without paying TVA (French
VAT), and then lease it back to the developer for an agreed period
at a guaranteed annual rent, typically 3 to 6 per cent. These properties
are bought furnished and will be managed by the developer for the life
of the lease, at which point the property returns to the freeholder. Very
often there are pre-approved mortgages available and legal fees reduced
or waived. Given the capital gain and the fact that rental incomes are
guaranteed - these present a very exciting opportunity for overseas investors
and another alternative to the more traditional options.
For more information,
contact: Alex Charles Creme de Languedoc +33 (0)4 67 88 70 33
alex@creme-de-languedoc.com
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