Oh it definitely slowed. Prices didn't drop on the Riviera but the volume of transactions plummeted. Any time there is a crisis, the French tend not to panic. They just take their properties off the market and wait. This keeps the price steady but makes it just as hard for the few cash-rich buyers to find something they like as the demand/supply ratio is kept high.
I would attribute the flurry this year to a few of things. First is the ongoing PIGS saga is so long drawn out that fears of the Euro collapsing is fading. The UK economy isn't so rosy itself so people aren't waiting for Sterling to start suddenly shooting up against the Euro any more. After the roller-coaster of UK house prices, people probably don't mind putting their money in somewhere that's shown itself to be stable like the South of France.
Secondly, the flurry isn't mostly from anglo-saxons. Though they are coming back in small numbers, the demand is mostly from Russians and Scandinavians. One of my rivals that deals with Russian clients has properties flying off the shelves, normal apartments and not just high end any more. Personally I have gone from an almost exclusively English clientele to around 50% Scandinavian.
A third factor is that the developers are coming back. When the crisis hit they all cashed out and disappeared from the renovation business. They mostly made a fortune. Then last year the French went mad buying for 'defiscalisation'. With the "Loi Scellier", you could buy up to €300k of property (must be new build or a complete renovation) and write 25% of the value directly off income tax provided you rented it out long-term for at least 9 years. Doctors, lawyers, etc were snapping up anything and everything they could find. And the developers made another fortune.
Now the cash rich developers see a burgeoning international clientele and are building and renovating again in the areas desirable for a foreign buyers. Increase in supply + pent-up demand for property = flurry in sales.
The article linked talks about Provence, which I have no idea about, but I believe this to be the situation on the Cote d'Azur.
Phillip.
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