The property market in France continues to surprise. There has been a jump in sales of residential properties over the last 24 months in Franc, but the property prices remain rather depressed, even after many years of relative non-performance of the market.
What does this mean for you if you are looking to sell your property in France quickly? Should you wait for the Presidential race, which is to take place in the coming months and see how that turns out? Or should you hedge your bets and buy property in France fast in 2017?
This is a tough call to make, as property prices across France hardly rose at all in 2016. But the scenario is a very complicated one. The most popular tourist locations in France, such as the Côte d’Azur, are doing very well. Here the property market is booming and prices have risen in double digits.
Things are not so clear cut in the region of Occitanie, which stretches from the Rhône Valley to Toulouse. Sébastien Lorrain, a real estate analyst who works for the CBRE, says in an interview with the Financial Times, “Since the end of the summer we have seen a major return of purchasers to the market. Prices have fallen by around 7 per cent over the past five years and interest rates are at a historic low. There is also an overhang of potential supply after years of low transaction numbers, as well as improved consumer morale.”
Apartment prices in Paris have been rising as well. In fact, the government has taken many measures to encourage property investment and this has certainly helped homeowners in Paris.
As Cyril Robert of Knight Frank says, the property market in France has been very patchy and is not the same in every region of the country: “You can see the impact of regional economic factors in prices and transaction volumes. Apart from the Paris region, this is strongest along the west coast and the Mediterranean, areas that are more economically dynamic and are seeing strong population growth.”
Few things are clear in the real estate market here. Property prices vary widely, from €5,000/square metre in the Paris suburbs to just €3,000 in the other cities in the country. The northern and eastern regions remain behind economically and there is no sign as yet that the property market here has recovered by any extent.
Aurélie Lemoine of the CBRE says, “This year there has been take-up of 1.7m sq m in the Paris region, which represents a modest recovery from last year. However, there is not a significant net absorption because job creation remains low. Volumes are growing, while rents have remained stable over the past year.”
Still, wealthy overseas buyers continue to invest heavily in France, says Thierry Laroue-Pont of BNP Paribas Real Estate. He says that any decline in the French housing market will be taken advantage of by sophisticated international property hunters.
“With Treasury bill rates at a historic low, even with yield compression on prime city offices in Europe, the difference remains attractive for investors, and they also appreciate the diversity of assets as well as the maturity and transparency of the market,” Mr. Laroue-Pont explains.
The next few months are going to be critical though, as France goes to the polls. Investors are believed to be anxious about the possibility of Marine Le Pen becoming the next President, as she has declared that she would want France to leave the European Union. This is an outcome that most overseas investors dread.