The property market is seeing an increase in buyers from around the world setting up homes in France, reports Vicky Leigh
More than 400 homes in Paris worth in excess of €1m have been put on the market since President Hollande came to power in May. Triggered by the new higher tax of 75% on all earnings over €1m, many of France’s millionaires are now looking to ‘wealth-friendly’ countries such as Britain, Switzerland and Luxembourg. Indeed, Bernard Arnaut, France’s wealthiest entrepreneur, is currently seeking Belgian citizenship.
However, the influx of homes onto the Paris property market is being viewed in a positive light by estate agents. Historically, the number of properties for sale in the city has been limited, a result of building restrictions and virtually no newly built homes. They believe that the increase in volume will go some way to redressing the balance, and will give those with a mansion-sized budget much more choice.
According to figures released by Notaires de France, prices in the Paris region have risen by between 3.8% and 6.2% for houses and flats respectively, while at the same time the number of Britons buying property here has remained stable at around 2% of all transactions, according to data from BNP Paribas.
The capital is certainly proving popular with Asian buyers. “Within France the Parisian market represents the biggest draw for foreign nationals, with Asian buyers in particular increasing their activity significantly to now represent the third largest group of buyers,” observes Tim Harvey, managing director of specialist French mortgage broker Offshoreonline.org. The lure of life in the French countryside is also attracting some Chinese buyers to more rural parts of the country. “Overall in France, Asian buyers now account for 7% of all purchases, with the most popular areas being Paris and the C�te d’Azur,” continues Tim.
It seems France’s popularity in other countries knows no bounds. As we recently reported in French Property News, France has caught the attention of many Australian investors who are being priced out of the Australian property market and upon finding that their money goes much further in France are now snapping up some of the country’s grand ch�teaux.
“France has become an increasingly attractive choice, not least because of low interest rates, easy access from the UK, better weather and good rental yields, but also due to some great property prices because of a slower market, which means that there are many motivated vendors who are open to low offers,” comments Clare Nessling of mortgage specialist Conti. “France represents relative stability amid the global downturn and the eurozone debt crisis, due to its more stable property and mortgage markets. It also offers the widest range of finance options and best available rates in Europe for UK buyers.”
This is supported by John Busby, of French Private Finance. “The French mortgage market is in good shape with many banks still willing to lend to non-residents at rates which sometimes beat those on offer to French residents,” he says. “The margins on variable rates have crept up but the margins on fixed rates are still fantastic. You can now get a mortgage in France at 3.60% fixed for 20 years which will definitely have long-term value over a 20-year period.”
“France’s accessibility, its climate and culture, political stability and transparent legal system, along with its natural landscape and history, continue to place it at the top of many second home wish-lists,” adds Kate Everett-Allen of Knight Frank. “Purchases across France’s prime regions are increasingly lifestyle-driven rather than investment-driven. A growing number of buyers conclude that investing in bricks and mortar in a strong, established international location which comes with lifestyle benefits attached is as safe a bet as any in the current climate.”