French Property Market – September 2022
There’s a lot going on in the French property market right, especially from a British perspective with the pound weakening against the Euro. So we thought that we’d take a look French property market from the perspective of somebody moving from the UK to France
WHAT DO THE THE NOTAIRES PREDICT?
Notaires in France play a critical role in every real estate transaction, and as a group have a good view of what the property market holds in store for us. The Notaires-INSEE (second-hand housing price index Notaires-Insee) provides a means of measuring changes in the prices of second-hand properties. The most recent INSEE data this shows us that prices of old real estate slowed in the second quarter of 2022, and sales volumes (although still healthy) also have begun to slow compared to 2021.
Furthermore, INSEE shows us that there is a clear shift in preference for green spaces and privacy since the first lockdowns, with sale prices for properties in the provinces increasingly significantly faster than apartment prices in the Paris area. So if you’re considering relocating to Paris, you might find some bargains in the city.
Outside of the major cities, house pricing has remained largely flat (despite a small up-tick in the aftermath of COVID). So if you are looking at relocating to the South of France your decision should be lifestyle one, rather than an investment (although Monaco does buck this trend). In fact the French Government is making efforts to make real-estate less expensive, and have introduced hefty taxes on second homes.
Interesting fact: Only 62% of villas in the French Rivera are used as permanent homes, the rest holiday rentals and vacation homes.
PLUS ITS GETTING HARDER TO BORROW MONEY IN FRANCE
The French government is trying to get banks to reduce the number of mortgages that they give, in an effort to disincentivise buyers of second homes, and property developers “flipping” properties.
Coupled with a poor economic outlook, and increasing interest rates, French banks have lost their appetite for lending, and so they have tightened their terms and set a maximum 25 years on mortgage repayments.
POUND v EURO PARITY?
With the pound at its weakest against the Euro in more than 10 years, and some analysts suggesting that parity is not out of the question, those Brits planning on moving to France have potentially lost around 20% of the of their funding allocated to purchasing a property in France.
Investment bank Goldman Sachs has slashed its forecasts for the British Pound, showing further losses against the Euro are likely and a retest of the recent lows against the Dollar are likely. But hey! who trust an investment bank anyway?
Economists at the Wall Street bank reckon a recovery is only likely in three months.
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