French Riviera Luxury Properties Face Drop in Demand, Latest Victim of Global Recession

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(NICE, France) -- Even the super wealthy are feeling global recession pains.

The demand for luxury real estate in the South of France has been steadily decreasing due to unwillingness of uber high net worth Russian and Arab buyers to make high-priced property purchases amid the consequences of the global recession.

According to one of the largest French real estate agencies, currently more than 10% of luxury villas on the French Riviera are seeking buyers. Due to the crisis, housing prices in Cote d' Azur have fallen by 10-20% with further falls in prices expected in 2010. The current price for a standard villa in French Riviera starts from $4,500 per square meter, compared to $6,500 in 2008, while for luxury housing from $15,000 per square meter, compared to $25,000 a year earlier.

There is still no buyer for the most expensive French villa -  Villa Leopolda, a Belle Apoque mansion on the heights of Villefrance. According to recent rumors Mikhail Prokhorov, one of Russia's wealthiest businessmen who has been in the news in the U.S. recently through reports that he is awaiting NBA approval on his proposed acquisition of the New Jersey Nets basketball team. Mikhail was named among the main bidders for the villa, however, the current owners of the property did not agree to drop the price to 200 million euros, while Prokhorov decided not to spend nearly 500 million euros for the villa, built by the Belgian King Leopold II.

"Russians are no longer buying our villas," - said an official representative of Barnes Real Estate, one of France's oldest real estate agencies. "Those who bought the house earlier are trying to get rid of them, often with a substantial discount".

Another Russian billionaire named Roman Abramovich is also rumored to be putting up for sale soon his La Kroe villa, which located on the Cap d'Antibes and would be priced around $20 million euros.

Now most of the French real estate sellers put their hopes on buyers from Saudi Arabia or China.

In addition to the French luxury property, the crisis has significantly affected the demand for the Italian luxury property. Currently the local sellers are still seeking buyers for a well-known Medici Villa (1500 square meters), built in the XV century and belonged to the dynasty of the former rulers of Florence, which priced at 5.5 million euros.

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