Global real estate - what’s next?

The greatest TV series of all time is The West Wing, don’t even bother disputing this in the comments section. In the fictional White House, President Bartlet famously says “what’s next” whenever he wants to move the conversation on.

This week has seen the property industry trying to do exactly this.

Savills, Knight Frank, CBRE and every property commentator on Twitter have been making predictions.  They want to move the conversation from “WTF” to “We know what’s happening and are in control”.

Of everything I’ve read (which is a lot, as I’m a sucker for punishment) Knight Frank were the most bullish....prices going up in Central London, farmland resilient, 4.5% growth in GDP next year and more. Read yesterday’s daily summary here.

https://www.knightfrank.co.uk/research/article/2020-04-07-your-morning-market-update-from-knight-frank-research-tuesday-7th-april

I get that a) research departments want to show their bosses that they are busy and b) these reports generate column inches, but come on.

We have no idea what the social, political or economic impact of this pandemic will be. People talk about the 1918 flu pandemic (heaven forbid this gets that bad) but it’s well documented that it was the “second wave” that caused the majority of deaths. We’re still on the upward part of the graph in the first wave here.

I’m not trying to be alarmist, just saying that all of these weighty “forecasts” should be taken with the Salar de Uyuni*. I do also understand that markets are about perception and that we should all be staying positive, but let’s just be realistic too. The French economy reduced by 6% in Q1 and will fall by a further 1.5% every 15 days of confinement (source Bank of France, 08/04/20).

Nobody knows what’s next, it’s way too early to tell. Hope for the best, plan for the worst.

On a micro scale, our company is seeing record visits to our website and we’re still getting high levels of enquiries by phone and email. The French property market has been hot these last two years (1.1m sales registered last year) and UK buyers have been rushing to “get in” before  31st December.  The underlying demand is super strong. Our hope is that we’ll be out of lockdown soon and we’re putting plans in place to keep clients and agents safe when viewings recommence.

But, if unemployment soars, if clients can’t get mortgages, if vaccines take longer than thought to develop, if....as a business we need to have contingency plans in place for these scenario’s too.

So, what I’m saying is, use these forecasts as emergency loo roll until the time that we know the peak has passed and that we come out of lockdown. Hopefully we won’t have long to wait.

Then, we can think about moving the conversation along and start making semi-sensible forecasts.

Meanwhile, stay safe, be compassionate and support our front line workers.

*biggest salt flats in the world, as I discovered on Race Across the World last week.

It’s been a while - a little drop of Coronavirus

So, a mate of mine in Australia asked why I didn’t take up the blog again during this exceptional period in our lives.  Challenge accepted Tracy.

A fair bit has changed in the last seven years. I’ve got a proper job, my two little girls have (rather surprisingly) metamorphosed into young ladies and the world is in the grip of a pandemic and in a pretty much global lockdown. Well, apart from Belarus, where they are still playing football in front of capacity crowds. President Lukashenko reckons that vodka and saunas will keep the virus at bay. Let’s hope that Fox News don’t cover the story.

In the last 18 months I’ve had heart problems, a pacemaker fitted, skin cancer and, in December, aggressive prostate cancer, leading to a radical prostatectomy, Despite all this I feel physically fit - I rode 100km’s on the indoor trainer yesterday, which is some going seeing as I was only allowed to start cycling again three weeks ago.

What’s changed (and it’s not easy to say this) is my mental strength.  Even after the pacemaker and the skin cancer I felt indestructible. However, the two nights in intensive care, after the prostate surgery, put paid to that. I suddenly felt mortal and it was sobering. I’m lucky to have Juli-Anne by my side and her shining light lit up the darkest moments. I don’t even want to think about what it would have been like without her.

I didn’t lose my positive attitude to life - I gave myself all kinds of goals and I’ve been smashing them out of the park.

But....and it’s a big “but”....I suddenly find myself feeling nervous. I really don’t want to catch this damn virus. One of the symptoms that led the doc to discovering my heart problem was “breathlessness” and I‘m struggling to come to terms with the fact that I’ve moved from indestructible to vulnerable.

So, current situation - family safe, well and, thankfully, at home. We’ve been in lockdown for two weeks with a minimum of two weeks more, although I suspect it will be longer. No complaints; cupboards are full, we’ve had beautiful weather, books take a second to download and the girls are baking every day. J-A is helping the local nurses collect masks, aprons and other necessities. I’m riding on Zwift every day with pa-in-law and one of my best mates in England and tai-chi every morning has been a revelation.

That’s enough for now, it’s all been a bit personal but will try and make it more interesting over the coming days. There’s certainly plenty to talk about!

Life in the Charente - it's payback time

Some of you may know that I have an annual golf outing with three friends and we have been playing together since we were 17 years old.

Now, without wishing to appear boastful, it's relevant to this little tale that I'm better than any of them.

Far better.

I was a single figure golfer as a kid and if you go to the Drift Golf Club in Surrey you'll see the Downie name scattered around quite liberally in the trophy room.

My three chums were all cricketers and over the years have suffered from various ailments including hooking, slicing, topping and shanking.

We.ve played some fab courses together though - from Druids Glen to Paris National I've boomed one down the first only to try and pretend I'm not with them as they amuse the gathered audience with a collection of airshots, slices into the next county and even (I swear this is true) a shot that ended up thirty yards behind the tee.  How much did I enjoy saying "It's still you Steve"?

Better still we always play a few rounds of Greensomes which is where you take alternate shots. Usually my partner gets to play from 300 yards down the middle but woe betide if I hit a duff drive and have to take my partners tee shot.  I've played from the ladies tee on many an occasion as well as out of bushes, bunkers, ditches and adjacent fairways....all the time with people passing by and smirking, thinking what a duffer I must be.

I've suffered in silence because that's what you do for friends.

Well, it's payback time.  Golf is my past but cycling is my future....more accurately cycling with my father-in-law is my future.

You see we've entered a 20km, two man, time trial in October - the "Duo Jarnacaise".

You might see where this is going.  Pa-in-law is not just a good cyclist, he's a very good cyclist indeed.  He's been cycling all his life and has conquered the Ventoux, the Tourmalet and any other European mountain worthy of the name.

He has legs of oak, lungs that could power a steam train and a competitive spirit that makes Sir Alex Ferguson look like a politically correct junior school coach.

We cycled out to look at the circuit today and had a trial ride round.

It didn't go well.

Pa-in-law had this crackpot idea that we'd be taking it in turns to shield the other from the wind and that this was some sort of team event.  Not so - we'll go fastest if he drags me around behind him but we'll still be way slower than if he was doing it by himself.

At the end of our practice I was wheezing, panting, dead on my saddle but generally pretty pleased with myself.

Now, I get on like a house on fire with "beau pere" - he's more than family and is one of my best friends on the planet. So I could tell he wasn't happy.

Our ride home started with some chuntering.  Words like "humiliation" and "disgrace"started being bandied about and soon developed into "knew you were a wrong 'un" and "I'd be better off doing it with your mother-in-law".

Haha....I've been waiting 35 years for this....you just have to take it on the chin Dave.  I know what it feels like to be dragged down but as Mahatma Gandhi said "The law of sacrifice is uniform throughout the world".

If anyone wants to come and cheer us on, the Duo Jarnacais team time trial takes place on Sunday 6th October.

I'll be the one sheltering behind the chap with a look of anguish on his face and his cap pulled down low :-)

www.cognacproperty.com

Cycling in the Charente

OK, I know that we don't have the dramatic scenery to match the Alps & Pyrenees.  Come to the Charente and you won't be faced with the horrors & challenges of Alpe d'Huez, Mont Ventoux or the Col du Tourmalet.

However, I genuinely think that cyclists of all standards will be thrilled if they bring their bikes & obligatory lycra to the sunny Charente.

For once I remembered to take my camera out with me yesterday in the early evening and took a couple of snaps to show what I mean.

This first one is of the bridge at Juac.  It is one of many that criss-cross the river between Jarnac and Chateauneuf.  Although we went "off piste" yesterday, our regular lunchtime route is a 30km circuit that starts in St Meme and goes through Saintonge, Graves, Vibrac, St Simon, Juac, Bassac, Jarnac, Gondeville and back home.

My second pic was taken when we deviated from this route and climbed the short hill to Moulidars.

This small lane actually runs in front of a house that I bought for a client a few years ago, it's an idyllic spot.  There's an equally nice view the other side of the hill that yesterday was looking down over dazzling sunflowers & the ubiquitous vines.

The juxtaposition of the two with the greens & yellows sparkling in the evening sun was truly spectacular but sadly I was hurtling downhill at the time and didn't have the legs to cycle back up to capture the moment.

You'll just have to take my word for it!

www.cognacproperty.com

The Poitou Charentes playlist

Was out working this morning - driving through the vines, in the Charentaise sunshine, with the windows down and the music turned up maybe a notch too loud.

It made me grateful to be alive and so, so glad that we took that leap of faith ten years ago and made the move to France.

The two albums I was listening to are en vogue in our household as it's two artists we have seen perform live recently.

The first - Passenger - we saw in Paris at Le Trianon and he was superb. Here's a little taster of my favourite song taken from a time before he hit the charts.

The second album was that of a busker we saw in Covent garden recently called Sammy Jay. She hasn't quite hit the big time yet but perhaps one day she will (don't forget that my youngest spotted Ed Sheeran way before he became famous and has a knack for these things).  Here she is singing Price Tag.

Perhaps you won't like these young artists as much as me or maybe they're like the local "vin de pays" which needs to be drunk on a summers evening on the vineyard where the grapes were grown....but then again perhaps you will - and you'll understand why I was driving along with a huge smile on my face this morning :-)

www.cognacproperty.com

Poitou Charentes - flavour of the month with international buyers

More on the 5th annual "Investing & Living Abroad" survey by BNP Paribas International Buyers.

It was interesting (but not all surprising) to see that every single region in France saw the number of international property buyers decrease in 2012.

Except one.

Poitou Charentes.

Yup, sleepy old Poitou Charentes, with it's low property prices, glorious beaches, rolling hills covered in sunclad vineyards and friendly, old fashioned, locals.

Here in paradise we actually saw a 4% increase in the number of sales to international buyers who spent an average of €145,000.

78% of these buyers were from the UK, 13% from Belgium, 5% from Holland and 4% from Germany.

Who knows what the reason is?  Perhaps it's the micro climate that makes it the second sunniest area of France (well not all of the region but certainly the arc between La Rochelle and Angouleme), or maybe it's the attraction of Cognac itself which has seen sales of the amber nectar boom over the last few years.

Whatever - they say that in troubled times it's the prime areas that fare best and I'd say that this is certainly true in this case.  All those smart buyers are probably sat by the pool in their old, Charentaise, stone houses, with views over the vineyards, as I write this.

If they used me to help them buy it then they'll probably also be feeling quite smug about the price they paid :-)

www.cognacproperty.com

French property sales to international buyers becalmed

The 5th annual "Investing & Living Abroad" survey by BNP Paribas International Buyers came out earlier this month.

For those of us who earn a living working with international buyers they make pretty gloomy reading but there are one or two silver linings if you look hard enough.

The headline figure is that house sales in France to "non resident" purchasers dropped by 29% to 10,663 (from 15,073).  There is no getting away from the fact that it's a tough market and until consumer confidence returns many people will keep their hands in their pockets rather than splash out on a home in France.

However, there are a couple of points worth highlighting.

Firstly, those canny buyers taking advantage of the lower prices are spending more - on average €384,000 which is a €64,000 leap over the figure two years previously.

Secondly, these tend to be astute cash buyers, with only 20% of them requiring a mortgage.

Finally, we were shown the figures (which I have forgotten sadly) of UK expats who have sold but moved within France (ie moved to the next village along).  I remember thinking that this figure was pretty high - not far short of the number of buyers from the UK.  This flies in the face of all the headlines of "Brits fleeing France back to the UK".

Anecdotally, I know far more expats who have sold and moved within France than expats who have returned "home".  These figures never get reported and I'm glad that BNP Paribas included it in their research.

I do firmly believe that there is a pent up demand and that once confidence returns we will see a big influx of international buyers again.  Time will tell.

www.cognacproperty.com

Property bargains to be had in the Charente

I have just finished showing clients round a selection of properties in the Charente valley, including the magnificent house shown above which is in a prime location right by Cognac golf course.

We really did see some terrific houses - the weather wasn't kind which was most unusual in June but even with leaden grey skies my clients commented on the natural beauty of the shortlist we had put together.

As 2013 progresses it's becoming clearer that many owners see no sign of respite to the "crise financiere" and are willing to accept offers so that they can move on with their life.  This can only be good for the market as the gap between vendors & buyers expectations closes.

Whether it's stood outside the school gates, over dinner with friends or chatting with local agents & notaires I'm constantly hearing tales of houses being sold at well below "sticker price" - at all price levels.

Combine this with the ridiculously cheap cost of borrowing and the time could be right for picking up a property that has both long term capital growth potential and sheer natural beauty.

The houses we visited this week ranged from around €350-500,000 and I'd say that they would sit comfortably alongside any portfolio of country houses that are being offered by my old employers such as Savills, Jackson-Stops & Staff and Chestertons.

Just make sure you do your homework and work with someone who knows the local market intimately - that way you'll be able to negotiate hard and secure a bargain of your own.

www.cognacproperty.com