The return of optimism
As we start a new decade, the world’s continuing love affair with France as a place to visit is undeniable as it attracts more visitors than any other country on earth. This is hardly surprising given the incredible depth and diversity of culture, history, cuisine, wine, countryside and climate that France has the good fortune to possess. It genuinely has an embarrassment of riches that creates, in the minds of many, an idyll they covet and as a consequence a desire to acquire a piece of it for themselves.
Does this idyll stand up to scrutiny when potential property buyers are considering purchasing their own corner of France?
The short answer is yes, but don’t take our word for it; here are a few reassuring facts and figures.
- The market for foreign buyers of property in France grew by 6% in 2018 with the trend continuing strongly in 2019. In fact, it’s a trend that has been steadily growing since 2015.
- Despite Brexit, the British remain, paradoxically, the main non-resident foreign buyers accounting for some 27% of the market at the last count with Belgians, Italians, Scandinavians and Swiss making up a large proportion of the balance.
- The Cote d’Azur and Provence keep their lead as the main areas for non-resident investment accounting for 20% of the total market.
- Once thought of as a nation of renters, the French have now become, in a major role reversal, a nation of owners with the proportion of homeowners exceeding that of the UK. The domestic market is currently healthy with resale volumes at a record breaking figure just above 1 million transactions as of the end of July 2019. That is up from 564,000 in 2014.
- The Notaires de France latest quarterly report shows modest price increases in all prime areas.
We have over the last couple of years suggested that despite political paralysis in the UK the property market in France was slowly but surely improving and that any potential UK based potential investors should not be fearful. Brexit issues had no direct or meaningful impact on the French property market.
It appears the figures bear out our opinion and it is good news that the broad market metrics are positive. Any potential buyer can be reassured that downside risks are currently low.
The latest Prime France Report by Knight Frank shows that prices on the French Riviera have passed the bottom of the ‘curve’ and are gently improving. In general, we agree with this analysis although we would caution that the disparity between high asking prices and actual value remains a fundamental characteristic of the market and buyers should be very careful not to be lulled into a false sense of security by improving market conditions. It goes without saying that one of the pillars of the service that HB French Property Intelligence provide is advising on value; ensuring clients pay a fair price after negotiation.
We can safely say that none of our clients has ever bought French property for purely economic reasons. Lifestyle for owners, their family and friends is the key driver. If this lifestyle can be justified either by occasional rentals to offset running costs or through the knowledge that the asset is held in a mature, blue chip market where long term value is maintained, then that is usually sufficient to give clients confidence in their actions.
To buy or not to buy?
Clearly this is very much personal decision territory but if it gives any comfort to potential buying clients that our interests are aligned with theirs then two of our team are at this moment involved in personal property projects.
One is currently purchasing an apartment in Nice for family use. Another has recently sold a house in Valbonne having renovated it with their spouse and have now acquired another with a view to renovating it in order to add further value.
Believing in our market as we do we are prepared to put our money where our mouths are and have no hesitation in recommending the same course of action to others.
Although we cannot guarantee ‘oven ready’ deals we would suggest ‘no more dither and delay’. There is no compelling reason to do either.
Happy New Year
If you would like further information on the full range of services that HB French Property Intelligence provide or further market commentary please contact Nigel Hindle on: nigel@hbfpi.com or +44 (0)7789 985 484