French Property Report - An Overview of Today's Market

in Price

Where we are

The French property market today offers more choices to the buyer than at any other time in the last decade. In some areas of France, there is a reduction of as much as 25% on the property prices of 2006. There are more quality French properties on the market then ever. In the past, there were many cheap properties to restore but a shortage of bargain restored properties - now the buyer can choose from both quality restored properties and restoration projects.

If we look back over the last 20 years, we can identify patterns that lead us to this distinct position and that may suggest future trends.

At present the French property market has found a new lease of life because of highly competitive pricing and lower interest rates in the market place. House prices have leveled to around 2003/2004 values.

From the broader historical perspective of the peaks and troughs of French property prices, we are at a similar position to where we were in 1995 / 1996.

How we got here

In the late 1980's property prices grew beyond the reach of the first time buyer and this in turn stalled the entire property market - prices began to fall. This decline continued through to the mid 1990's.

1995 is regarded as the bottom of this slump. Those of us who bought a this time remember the superb property bargains on offer at unbelievable prices and have seen our investments flourish.

Prices then slowly rose for the following ten years due to the increasing demand and increasing numbers of buyers looking in rural areas of France - largely from the UK and Northern Europe.

Prices started to slow down from 2005 and the number of properties for sale increased in relation to the number of buyers. Lending policy unnaturally prolonged this boom period in the property market and caused the inevitable fall of prices in 2007 to be much more severe than necessary.

By 2008 it was finally obvious that the market had overheated. This, in conjunction with the global recession, led to a decrease in demand and in turn to a brutal collapse of prices.

Where are we going

Taking into account that 2006 was probably the last peak for French property prices - and if this trend is repeated - a new peak should arrive around 2015. Prices will slowly rise from now until then. Today we are still feeling the after shock of the dramatic collapse of the market. However, there is cause for optimism.

There are indications of a slow recovery offering opportunities for astute buyers to get back into the market place on favorable terms with 2010 probably being the bottom of the trough.

French property prices are down in some areas of France as much as 25% below 2006 prices and remain extremely attractive. Sterling value to Euro seems to be improving from an all time low of 1.03 in December 2008 to today's 1.15 and all indications are that this will continue to slowly increase.

If higher inflation is around the corner, as many forecast, then the property market is still a safe place to invest. With only 16% capital gains tax for residents outside of France, exemption after 15 years, and low local property taxes, a holding in France makes economic sense.

Previous trends and current prices strongly suggest that today is the time to take a serious look at some of the bargain properties available and to take advantage of some of the highly competitive interest rates available from the banks.

Author Box
Trevor Leggett has 1 articles online

Trevor Leggett is chairman of Leggett Immobiler - a company he established in France over 18 years ago.
French property by Leggett Immobilier has over 1000 recently reduced french properties

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French Property Report - An Overview of Today's Market

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This article was published on 2010/04/02