Confidence in French property grows
- Credit: Archant
Vicky Leigh discovers there’s a sunny outlook for the property market
Buyers are adopting a more confident attitude towards purchasing property in France. While uncertainty over potential tax changes in the second half of 2012 resulted in a fall in demand for prime property, it seems that foreign buyers are now making a welcome return to the French property market.
According to the latest Insight report from Knight Frank, buyers who feel that they are being offered value for money now have the confidence to go ahead with a purchase, whereas a year ago they showed much more hesitancy. This is resulting in more sales, with the volume of prime sales completed in France increasing by over 20% in the 12 months to March 2013, compared to the corresponding period a year earlier.
This upsurge in interest was also evident on Knight Frank’s Global Property Search website, with a 19% increase in searches for French property in the first two months of 2013, again compared to the corresponding period in 2012.
“During the course of 2012 we saw an increasingly clear demarcation emerge between those buyers who are willing to accept the new tax landscape and the fragility of the eurozone and those that prefer to simply monitor the market from the side lines,” comments Paul Humphreys, head of the French desk at Knight Frank. “Those buyers keen to move forward rather than keep their second home plans on hold have grown in number so far in 2013.”
President Hollande’s tax changes, which caused so much uncertainty when they were first revealed, are in fact less unfavourable than was initially feared. The report notes that potential buyers are now measuring their concerns over the tax plans, and the increases in capital gains tax, against their reasons for buying in France and the ‘lifecycle’ of their new home.
“Many buyers plan to retain their home for a minimum of five to 10 years, and therefore take the view that a new government may be in place and the current tax structure will be redundant by the time they choose to sell,” says Kate Everett-Allen, head of international residential research at Knight Frank.
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Trevor Leggett, of estate agency Leggett Immobilier, has also witnessed an increase in interest. His agents are reporting increased activity across the whole of France, and have seen a 31% growth in sales year-on-year.
“This pattern is not just at the bottom end of the market either,” comments Trevor. “Buyers sense that there are bargains to be had at all price levels, with vendors finally understanding that a property has to be keenly priced to sell.
“Mr Osborne may have faced criticism for his recent Budget but it could well have an indirect effect on this side of the Channel,” he continues. “If people feel a little more confidence in their finances at home then this feel-good factor could well spread to their plans for second home-ownership.”
Anne Mizrachi of Latitudes French Property Agents has also noticed increased activity: “The number of people contacting us has steadily increased since the start of the year and we had over 60% more enquiries in March than in January. Thanks to easy access, a wide selection of well-priced properties and a good climate, France certainly seems to be the right destination for lots of people.”
In view of the UK’s unseasonably cold spring, the promise of a better climate is perhaps even more attractive, as Allan Bright of Limousin Property Agents explains. “Our sales volumes have increased and while we would always expect to be busier in the spring, this may well be down to the good weather we’ve had, particularly when compared with the UK.”
Temperatures on the UK side of the Channel may have been on the low side, but the outlook in France seems to be very sunny. “We anticipate 2013 to be a turning point in the French property market, leading to a continued revival of confidence in a sector which has traditionally shown resilience thanks in part to the relatively stable political and economic backdrop but also because of the lifestyle choices it offers,” concludes Paul Humphreys.