Falling prices create a buyer’s market
The latest figures released by FNAIM reveal that property sales in France fell by 25% in 2012. For those keen to get a foot on the French property ladder in 2013, the reduced prices will surely provide many potential buyers with the perfect opportunity. When combined with the historically low mortgage rates that are currently available, the prospect of owning a home across the Channel becomes even more achievable. A number of specialist overseas mortgage providers have already seen enquiries for French property purchases increase significantly in the past couple of months, as would-be buyers take advantage of these favourable rates.
Data collected by the French estate agency federation showed that the regions of Brittany and Normandy were the most affected. Published in January, the Notaires de France French Property Market Report also found that since March 2012, the number of sales calculated over the last 12 months has fallen by an average of 2% each month compared to the previous 12 months.
Experts believe that the poor economic climate, combined with asking prices that are considered to have been too high, contributed to the fall in sales. The difference between asking price and sale price was 5.08% in 2011, but this increased to 5.46% in 2012. Bernard Cadeau, president of the Orpi network of estate agencies, has encouraged a re-evaluation of sale prices in an attempt to “unblock” the property market.
Interestingly, while the number of transactions fell in 2012, the figures also revealed that prices increased overall by 0.8%. Ile-de-France saw the biggest rise in prices with a 1.5% increase, while prices fell most in Lower Normandy and Brittany, with a drop of 5.7% and 5.3% respectively.
Regions such as Rhône-Alps are, however, bucking the downward trend in sales. Alpine property has been riding high in the popularity stakes, resulting in increased demand and sales. In Méribel, for example, the price per square metre has risen by 15.1% over the past year. A study of property market trends published at the end of 2012 by the Chambre Interdépartementale des Notaires de la Savoie et de la Haute-Savoie found that the region is weathering the economic storm and continues to appeal to overseas buyers as a second-home destination.
Many expect that the trend seen in the Alps is set to continue in 2013, although the consensus view is that prices will fall elsewhere in France. However, the rate at which they are expected do so varies. FNAIM predicts that prices will fall by 2% in 2013, the IEIF (Institut de l’Epargne Immobilière et Foncière) suggests a drop of 3% and Standard and Poor’s predicts 5%. January’s French Market Report from the Notaires de France also supports the view that prices of both apartments and houses in the French provinces will fall, with a stabilisation of prices predicted for inner Paris.
It is very much a buyer’s market, and French property continues to be seen as a stable investment, offering both a long-term asset and long-term enjoyment. It regularly comes top of the list as the most popular destination to buy a property abroad, with many keen to take advantage of the quality of life it offers. As the world’s leading tourist destination, properties in France also have great rental potential, thus generating a source of income and a further return on investment.
For a fuller report see the March issue of French Property News