More Asians buying into dream of owning property in France
Asians are tempted to own real estate in the countryside, writes Peta Tomlinson
In the rush and bluster of our busy world, who hasn't entertained the occasional thought to swap it all for a life less harried?
Such notions don't come much dreamier than the thought of running away to the French countryside where, say those who have gone before, the wine and laughter flow in equal measure, and the biggest decision of the day is whether to dine indoors or out.
Britons have traditionally dominated the foreign buyers' market for property in France, often to gain a handy, affordable vacation home, but, now, Asians, too, are chasing the dream.
Alasdair Sutherland, the former vice-president of global public relations firm Burson-Marsteller, is one of them. Having lived for years in a tiny Mid-Levels flat, Sutherland, now retired, yearned for something different when he left Hong Kong. Returning to Europe, he wanted the biggest house he could afford.
Sutherland says: "The UK countryside was out, and this essentially meant buying a ruined country house in France where the small funds we had would go much further."
Some 30 minutes from Toulouse, in southwestern France, he found a ruined 19th-century farmhouse with three hectares of land, barns and stables, all in "terrible condition", but with spectacular views of the Pyrenees mountains.
Over the next 20 years, Sutherland and his wife rebuilt the property to provide luxury family accommodation, a guest chartreuse with a clock tower and a summer pavilion with a pool. Now that they have decided to sell and move to Italy, he isn't surprised at the level of interest in the property coming from Hong Kong.
Sutherland says: "Toulouse, a thriving university town and France's fourth largest city, is a well-connected hub ideal for commuting around Europe.
"Being inland and two hours from both the Mediterranean and the Atlantic coast, there's virtually no crime. We have a Mediterranean climate … It's deep countryside, but only 30 minutes to Toulouse Blagnac Airport. And there's skiing in the Pyrenees, two hours away."
According to Sutherland, such a property is the solution for someone wanting to escape from Hong Kong, even if only for holidays. He lists several ex-Hong Kong executives who are now living in the area, and says that since advertising his property for sale, he has had inquiries from many Asia-based families. The asking price is €1.25 million (HK$12.6 million).
The latest data from real estate research company DTZ shows that foreign interest in French property is translating into sales. Its second quarter research this year shows that by the end of June, Asian investors accounted for more than €500 million of the total €6.3 billion invested in French commercial property this year - the highest investment volume since 2009 - which ranks them the third highest after French and Middle East investors. In the luxury residential sector, Chinese investors ranked second behind Americans, with a 7 to 10 per cent market share.
Henry-Aurélien Natter, DTZ Research's chargé d'études, says: "Asian investors [especially Chinese, Japanese and South Korean] realise the dream of buying a piece of history and a part of French culture. They like to invest in the Haussmannian buildings in Paris, or a castle and vineyard in the south of France, because of the lifestyle or the idyllic vacation." But the main reason is that Asian investors perceive the luxury residential segment as solid, "which is the reality of the French investment market", Natter says.
Research by BNP Paribas International Buyers also points to ramped-up activity in France. The research found that Asia's share of investment in French property had risen from 6 per cent in 2009 to 10 per cent last year.
The firm's latest Investing & Living Abroad report shows that this is part of a global trend. In a survey of clients carried out in May, of the 42 per cent of investors who already own property outside their home countries and are considering another purchase soon, half of them have their sights set on France.
As for where they are buying, the report found that investors continued to seek properties where they could get more for their money, opting for locations such as the South, the West, the Alps and Paris.
François Laforie, BNP Paribas International Buyers' managing director, says that French property prices have remained steady against a decline in many other European countries, such as Spain.
Laforie says: "France also has one of the most secure transaction processes in Europe - all supervised by notaries, which makes everything official. This makes a real difference for people … not used to our language or customs."
Not forgetting France's reputation for food and wine and quality of life, he adds.
But some are worried that the dream may be dented by a steep increase in capital gains and rental income taxes on French property, which now applies to foreign owners as well. Yet, others say it could open the door to opportunity if prices fall.
Tess Sheeran of Sheeran Serre (part of the Savills French network), who sells luxury property in the Var coast/Provence area, says none of her Asian clients would worry about such things.
Sheeran says: "Provence is very upmarket - the location, the architecture, the lifestyle … The reasons our clients want to buy in Provence are never subject to whether they will be paying more capital gains tax or more tax on their rental incomes.
"They want the lifestyle, climate and all the other aspects that make Provence the most reputed international destination in Europe."