New build properties on the French Riviera are some of the best investments around, combining peace of mind for the buyer, high rental yields and a strong likelihood of capital appreciation. The lack of developable land on the Riviera ensures price stability while the renting culture that is still prevalent in France means that finding quality tenants is relatively easy.
New Builds in Nice
New build, or off-plan, properties offer significant advantages that appeal to both investors and people looking for a holiday home. For buyers who want to avoid any hassle associated with renovating a property in France, new builds come with numerous guarantees such as a one year perfect completion guarantee, a two year fixtures and fittings
guarantee and a ten year structural guarantee. French developers are heavily regulated and this regulation avoids many of the problems seen in other countries, such as half-built estates, lack of local transport infrastructure, etc. An important new build guarantee is one that states that a property must be finished once it has been started.
Financing for new build projects can be covered by a French mortgage with stage payments throughout the construction of the property. There are mortgage products available that exempt buyers from repayments until the property has been fully completed, so you don’t pay anything until the apartment can be let out. An initial deposit of 5% is paid with the signing of the provisional sales contract, the ‘compromis de vente’, with further payments made according to the stage of construction. As a general guideline, payments are as follows:
- 5% initial deposit upon signing the ‘compromis de vente’
- 15% when building starts
- 15% at foundations stage
- 20% when the floors are laid
- 10% upper flooring
- 5% water tight
- 15% partition walls
- 5% tiling/carpeting
- 5% on completion of works
- 5 % at the key handover (delivery)
A significant advantage of buying new build property is the reduced Notaire’s fees. On most French property, Notaire’s fees are 8%. On new build property, a reduced rate of between 4% applies.
In terms of capital appreciation, new builds are interesting products in that a buyer purchases a property once he/she signs the ‘compromis de vente’ but does not pay everything until the property is ‘habitable’. During the intervening period, buyers benefit from any capital appreciation that has occurred. Combine that with the aforementioned mortgage products available exempting buyers from repayments until completion of the property and investors can realise a significant capital gain with minimal or zero capital outlay.
Developable land on the French Riviera is constrained by strict planning laws, so when new builds come on the market, they are often sold out long before completion. French developers aim their properties primarily at the French market, so foreign buyers can be assured that there is a strong local market available to purchase their properties if they decide to sell in the future.