If I were a rich Swiss, I’d know exactly what to do: buy a house in France for a trifle. What with the Frank nice and strong, the prices down and the sellers at their wits end… you can really find some good deals. And by the way, this is exactly what wealthy Chinese and Russians are doing right now. They are investing in French real estate. And not just big posh buildings in Paris. Villa’s on the Rivièra and in the Biarritz area are just as sought after by these nouveau riche from emerging economies. The Chinese and the Russians seem to have more money than taste. They are fond of marble and gold. It all has to look ostentatiously expensive. And even has to be expensive. If the price is low, the product is not good enough.
The art of selling to Russian ladies
I know an art gallery owner in a very popular tourist village. She sells paintings, ceramics and jewellery she gets from Paris. She told me about a Russian tour guide and interpreter who sometimes comes with Russian tourists, showing them around in a limousine. Several times, the Russian ladies came by and admired the gold trinkets she is selling. At first, they seemed interested. But upon knowing the price, they decided not to buy after all. One day, the guide told her why. The clients had spoken about the gallery on the way back, had said they really liked it, but found it was too cheap. Russian ladies simply do not want to be seen with a necklace that costs a mere €500. It has to be €1000, at least! Clearance sale: Pay two, get one! Of course, the gallery owner is glad to oblige. So now, the guide calls ahead before a visit. This gives the gallery owner time to change the price tags and actually doubles all prices. Now, she sells a lot more. She once even sold her whole stock of double priced jewellery to one lady, Christmas shopping for her friends at home! True story.
Solid investment in ‘pierre et terre’
Of course, when they buy houses, they are a bit more business like about it. I spoke to a property broker in the Côte d’Azur who told me he gets groups of Chinese businessmen ‘shopping’ for apartments on the Mediterranean coast. They really know the market price, but are willing to pay top dollar for a high end product. These buyers are serious investors. They drive a hard bargain, because they see the real estate as a safe place to ‘park’ their money. What with the gold price having doubled in the last years, the very insecure position of the dollar and the euro, they are looking for ways to spread their eggs over several baskets. Take their money out of the rickety money market and put it in something solid and tangible: pierre et terre. Some of these apartments in Saint Tropez and Biarritz stay empty 50 or even 52 weeks a year. Well-maintained, but rarely used. Just sitting there, waiting for the winds of international business to change.
Opportunities for home owners
Of course, not everybody will be profiting from the affluence of these Eastern investors. For the moment, they are looking for multi-million properties; castles, villas and penthouses. But it stands to reason that after the first wave of superrich, there will be a second of less wealthy but still well to do Russian and Chinese buyers. The simple millionaires, hoping to combine a prudent investment with the fun of a summer residence in France. There might even be a class of upper bourgeois with a taste for the real French life, and interested in country homes and manors in the million-euro price range.
Clisis? What clisis?
We hope the nouveau riche from the East will give the European property market a new boost. Although, for all our sakes, it might be better if they bought a couple of banks first.