buy to rent - Narbonne, a dynamic and accessible market

21-07-2020

Subject to legislative, regulatory or jurisprudential modification.

Close to the sea, Narbonne has continued to grow for over 20 years, while facilities and infrastructure have added to its attractiveness. Its real estate market, which offers excellent value for money, is one of the most active in the region. Prices remain stable for old properties. They are falling slightly for new properties, with production down in the first quarter of 2020.

A pleasant town of 55,000 souls, very close to the sea, the sub-prefecture of Aude has welcomed an average of 1,000 new inhabitants per year for ten years. Its net migration is thus the highest in the region (+1.2 on average per year) ahead of Montpellier (+ 1%) and Montauban (+ 1%). The real estate market has in fact benefited from a positive and constant dynamic for several years. Main residences represent nearly 53% of housing. Heliotropism works in full swing in Narbonne, which has all the advantages of a big city, without the disadvantages. “, notes Christophe Fütterer, president of Fnaim Aude. Large infrastructures such as Narbonne Arena inaugurated at the end of 2019, and Narbo Via, the museum of Romanity which opens at the end of 2020, further enhance its attractiveness. “ We have facilities worthy of a city of 200,000 inhabitants. “, Mr. Fütterer is pleased. At the crossroads of the three great metropolises – Barcelona, Montpellier and Toulouse – the ancient Narbo Martius is also the central city of Greater Narbonne, 5^e urban community of Occitanie (127,000 inhabitants, 37 communes) of which it alone represents 43% of the population.

The old, dynamic with stable prices

The lockdown period may have put projects on hold, but the second-hand market returned to its usual dynamics as of May 11. We received physical, local customers until the 1st^er June, given the 100 km limit, since then it has become more exogenous “, summarizes Frédéric Malquier, general director of the Soleil agency in Narbonne. “ The Toulouse region provides a third of buyers “, he specifies. According to him, the conversion rate of projects is better than before the lockdown: on 1^er quarter, one in four customers came into the agency to finalize, currently it is one in three. More generally, the market is, in large part, made up of seniors (those over 60 years old represent nearly 29% of the population) in a city whose median disposable income (€17,875) is one of the highest in the former Languedoc-Roussillon (after Montpellier and ahead of Béziers). According to a ranking established last year by Le Figaro, Narbonne is ranked 8th^e place of cities that attract the most retirees “, notes the real estate agent. They find here and in the surrounding villages rather stable and affordable prices.

” The average m² within the walls remains around €2,000 with large variations depending on the location or district, “, says Christophe Fütterer. ” We can also find things to renovate in the city for less than €1,000 per m²,” he specifies. The prices charged here allow you to afford 35% to 40% more surface area than in Montpellier or Toulouse. EDF district or Quai Victor Hugo for example. For a T3 in these cities we have a T4 here “, summarizes Frédéric Malquier. However, some old properties can go up in price, in very popular areas of the city center, such as the quays of the Robine, between the Barques and the Theater. An apartment of 100 to 120 m² on the top floor of a Haussmann-style building, with a view of the quays, can cost around €3,000 or even €3,200 per m². ” These prices are also stabilizing. “, says the real estate agent. They haven't changed much in ten years.

In this very large city centre, houses are the most sought-after properties, but there are few for sale. When there are some on the market, you have to expect to pay between €150,000 and €200,000, for a surface area of 75 m² to 90 m². On the hills, for example. Houses of 92 m² on a small plot of 180 m2 for around €195,000 are products that sell well but they are not overcrowded. ” says Christophe Fütterer.

The market is all the more active as interest rates are still very low, despite a very slight upward trend. Good files can claim 0.8% over 10 years and 1.2 to 1.4% over 20 years. “, says Frédéric Malquier. And above all, morale is there. ” Buyers have carefully studied their project, they visited their accommodation in virtual mode while waiting for the end of the lockdown to take action. “This period of confinement has resulted in a 25% increase in demand for houses, the surface areas of which are increasing (+114% to +155%) and with a rather large exterior. They can find them in the first belt around Narbonne. Properties of 120 m² on plots of 500 to 600 m2 which generally sell for between €250,000 and €300,000. Prices that can also be found in the nicer areas of Narbonne. The further away you go, of course, the lower the prices. In sought-after villages, such as Bizanet, Ornaisons, or Névian, north of Narbonne, the m2 of a beautiful house can sell for around €1,800 and in towns 15 km to 20 km away, around €1,600 per m2. ” There is a real demand for these properties which cost less, with larger plots of land. “, notes Christophe Fütterer. Particularly from first-time buyers who are looking to house their family with spaces that they cannot find in Narbonne. Taxation is also lower there.

On the coast

The coastline, 12 km away, is one of the most dynamic markets. The three seaside resorts of Narbonne – Narbonne-Plage, Gruissan and Saint-Pierre-la-Mer – have seen demand jump since the end of lockdown. Many buyers are looking for a second home, but the demand for main residences in recent old buildings is very regular. “, notes Christophe Fütterer who manages the Fütterer Property Immobilier agency in Narbonne-Plage. Here, the average budget for a small house of 70 or 75 m² on the beach is around €200,000. The same goes for an apartment (60 to 70 m²) 10 to 15 years old, habitable all year round. Gruissan is the most expensive resort of the three. And on this coastline where the population is constantly increasing, the market is well suited to rentals and prices are not high. ” An average-sized home rents for €9/m²/month and you should expect to pay €10 to €11 for a studio or a small 2-room apartment. ” says Christophe Fütterer.

Among the clientele, most often seniors, many are looking for recent, if not new, properties as a main residence. This construction market is developing at a measured pace on the coast and without major price differences with well-maintained old properties. In March, for example, the SM Promotion group, a local developer, delivered a building in Narbonne-Plage, 100 m from the sea, which sold very well, at an average of €3,000 per m². Another will be built right next door, in two years. And in Gruissan, in three years, a vast eco-district of nearly 800 homes should be launched. This coastline is the least expensive in France, in terms of quality/price ratio”says Julien Sangalli, associate director of the SM Promotion Group. With a sea view, the m2 can reach €3,500.

Active market in new construction

This new market has been very active in Narbonne, which has seen many collective housing units emerge in recent years. Particularly in the Gare district and along the Canal de la Robine, Quai d'Alsace up to the Route de Cuxac. Prices here start at €2,700 per m², with the top of the range reaching €3,500 or even €4,000 per m². Narbonne is a market for accession. There is no longer any tax exemption scheme since the city moved from zone B2 to zone C “, says Julien Sangalli, whose group is currently marketing 150 housing units within the city walls. Some exceptional products with a large terrace or hanging garden find buyers at €700,000. »

A part of this clientele, second-time buyers, has sold their village house and is moving to the city to do everything on foot. The district that is being developed near the Musée de la Romanité, for example, plans to have 1,000 housing units in the long term. In both seated and network sales, local investors now only represent 20% of customers. “In an uncertain economic context, they prefer to invest in property rather than leave their cash in the bank. Those looking to build find plots of 300 m². They are currently selling for €250 per m².

Master Marie-Luce Cabrolier-Lichière, president of the Chamber of Notaries of Aude

” We had a good first quarter until the lockdown, during which sales could not be signed. Since then, there has been a catch-up phenomenon and it is houses with an exterior that are selling the most to the detriment of apartments with balconies and houses without a garden. And price negotiations, if there are any, do not exceed 5%. In Narbonne, between April 2019 and March 2020, old apartments had increased by 10.7% (€1,830 per m² on average) and new apartments have at the same time fallen by 4.5% (€3,100 per m² on average). We are also seeing some owners withdrawing properties above €500,000 from the sale. And the increase in rates from 0.2% to 0.5% that is emerging could have an impact on the projects of young couples who are first-time buyers and whose situations are not perfectly stable. The development of teleworking could generate a new market; in any case, it is an avenue to explore. »

Examples of average prices in villages

Gruissan

Old apartments: €2,510/m² (+0.9%) Old houses: €1,410/m² (+1.9%)

Lezignan

Old houses: €1,270/m² (-9.2%)

3 questions to Claudine Llauro, president of UNPI66 and temporarily 11

What are the difficulties of this market?
Taxation is not decreasing, it is actually increasing. And there are also many constraints on renovations and many diagnostics required. However, not all buyers have €30,000 to spend on renovating an energy-intensive home. They try to update the electricity, heating and window frames. In fact, there are vacant homes (nearly 6% of the housing stock) in some city centres and there are big differences between the attractiveness of city centres and that of villages. And these vacant properties can paradoxically have difficulty renting.
Who is carrying this market?
It varies greatly depending on the municipality. But many buyers, pre-retirees and young seniors, come here to prospect to buy a second home (41.4% of housing) which they will make their main place of residence, when the time comes. In the meantime, some can rent their property to vacationers when they are not there. Many young people working in Narbonne are looking to live in the coastal villages, and it is a growing market for owners who have apartments or even a small house to rent.
The coast is also a tourist market
We are currently working on an accreditation for furnished tourist accommodation that allows a tax exemption of 71% of all rents. This would be new here. And it would allow us to control what is rented in our regions. For Narbonne, which is in a tourist area where more and more people rent for weekends or short stays, this would be an asset for those who are unable to rent their property for the year. Airbnb presents fewer constraints than a year-round rental.