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.