Thursday, February 21, 2013

Cost of new-builds continues to rise

A recent article in the French LeFigaro newspaper notes that the price of new-builds rose by 7% in 2011 and a further 0.9% in 2012. New-build properties cost an average 15 to 20 per cent more to construct but continue to attract potential home owners and investors.

The reasons include owners' concerns about the continuing rise in energy and fuel costs, which some predict could be as high as 30% by 2017, and the feeling that it is wiser to invest in energy saving measures (insulation, heating systems, waste recovery etc) now rather than face higher costs some time in the future. Even in my local area on the Mediterranean coast south of Perpignan, holiday apartments dating from the boom years of 1960-70 are failing to sell, while two blocks of brand new apartments were sold out before even the foundations were laid.

Hower spokesmen both from the construction industry and estate agents argue that continually changing (and costly) building norms are helping to price properties out of reach of the average buyer, particularly when combined with new measures - some still to be announced - governing the taxation of second homes. France meanwhile suffers a serious housing shortage, despite the presence of around 2 million empty homes, and the government's pronouncements that it wants to do all it can to stimulate tye property market.

Source. 14 February 2013.

Monday, February 11, 2013

Spanish links

One of the interesting aspects of living on the Mediterrane coast near Perpignan is that it takes only a couple of hours to be in Barcelona by car - and from April, in less than one hour by the new TGV rail link. A partial service is already operating, necessitating a change at Figueras, with a total journey time of under 2 hours.

These new developments of part of a wider European rail network scheme, which should eventually see a direct link from London to Barcelona by TGV. The new line passes under the Pyrenees and engineers have finally resolved the problems at the Spanish end where the line passes close (under ground) to Barcelona's 'unfinished' cathedral, the Sagrada Familia.

There are already extensive cross border links between Spanish and French Catalonia, including the same language spoken by many. With the high levels of unemployment in Spain, Spanish workers are crossing into France to find work in the building trades, which has upset French artisans. However, a recent programme on French televison revealed that many construction companies in other parts of France are so desperately short of skilled workers that they are recruiting - yes, you guessed it - Polish plumbers, electricians and other skilled tradesmen.

On the French side, it is estimated that most of the cigarettes smoked in the south are purchased across the border in Spain, along with petrol and alcohol, as a result of lower government taxes and generous cross-border allowances. Customs posts have officially closed but spot checks may be carried out - usually at rest areas either side of the border. Spanish and/or French police and customs are also be to be found on the international trains between Perpignan and Barcelona.

One final note, despite stories of heavily discounted property prices, holiday properties on the Spanish Costa Brava north of Barcelona are much the same as on the French Cote Vermeille, while Barcelona remains prosperous and attractive, and property prices are high compared with, say, Perpignan or Montpellier.

French Property News, February 2013

In this month's issue I have looked at the problem of 'vices cachés' - hidden defects that may cause problems for both vendors and buyers of French property. By definition, 'vices cachés' are defects that are not known about by a vendor, and for which he cannot be held responsible after sale of the property. Normally written into the sale contract is a clause in which the buyer accepts the property 'in the state in which he finds it' which normally absolves the vendor of any responsibility.

French courts have ruled that a 'prodent buyer' is expected to take all reasonable precautions, for example by employing an architect or surveyor, and he cannot later take action against a vendor if he has been casual in his approach. He is also expected to be aware of 'vice apparents' - defects which are obvious - such as out of date electrical or plumbing installations - which are not necessarily pointed out by the vendor.

By using an architect or surveyor, some of the responsibility for 'vices cachés' may be shifted onto the professionals (and their insurers) but again if they cannot access all parts of a building, their guaantees may be limited.

French Property News is on sale by subsription or through newsagents.

Sunday, February 10, 2013

French property - getting the market moving again

It is that time of year, after the Christmas and near lull, when property commentators start to publish their predictions for the French property market in the next twelve months.

Curiously, FNAIM - the French estate agents national body - announced recenlyt that all that was needed is a drop in property prices of up to 5 per cent! I consider that frankly laughable, as it already possible in today's market to negotiate a 5 or even 10 per cent price reduction during virtually any transaction. And as always, there are huge differences between sectors of the market, with some properties selling well and others not.

Among properties that are selling well are new-builds, constructed to the latest BBC norms for energy saving, even though their cost can be 10 or fifteen percent more than traditional dwellings. Among the reasons cited for their success are buyers' concerns about every costs, which continue to rise. Among recent examples shown on French TV were detached two and three bedromm homes which came with a guarantee that heating, lighting and hot water would come to no more than 15 (fifteen!) euros per month, using the latest heat exchangers.

The houses shown were in Normandy not the traditional sunny south. However in my area of the French mediterranean coast, holidays home sales are in total free fall, particularly those constructed in the 1960s and 70s and which have reached the stage where they need complete renovation (insulation, electrics, plumbing etc). Second home sales are also adversely affected by the French government's stop-go announcements about rates of taxation on second homes, which have still to be clarified. Nonetheless, in my local town, two drand new blocks of hooiday apartments are in course of contruction, one of them sold out before the foundations were laid.

Another type of property that is increasingly required are those offering three or more bedrooms, including new-builds, the reasons given being the rise in divorce and separations. which is turn lead to 'recompsed' families with several children. Adolescents need their own space and the traditional one or two bedroom apartment or house is no longer adequate. In my local town again, several estates of three and four bedroom houses have been built - priced from 400 000 euros average - and all are occupied. Conspicuous signs of prosperity include swimming pools and two or more cars parked outside.

So the picture is far from being uniform and depends very much on location and current requirements. Languedoc-Roussillon where I live has the highest rate of unemployment in France but is also France's fastest growing region.