Decline of city centres

France also is suffering a serious decline of its city centres, in much the same way as Britain and other developed western countries.

Having just moved from an apartment on the Mediterranian coat to a third-floor mini-loft right in the centre of my  nearest town (pop. 125 000) I was interested to read of the disappearance of over 25% of the restaurants - a drop from 258 to 190 establishments, of which 70 classed as 'town centre'. In terms of potential diners ('covers') this represents a reduction  of 158 covers to 10 640 since 2010.

What the town centre has lost the periphery has gained, along with the development of four major out-of-town shopping centres catering for every need. Here the gain has been in the order of 80% in four years, and overall comprises 72 establishments or 11 601 covers. At the four principal sites the number of restaurants has risen from 14 to 34 (148% increase) during the last four years.

It is clear from the figures that people are still eating-out and combining this with a one-stop shopping trip. I have already noted in the few days I have been established in my new apartment that, now that the summer season has passed, the town centre is busy only on Saturdays, totally dead on Sundays (when people tend to go to the coast), very quiet on Mondays (many establishments use this as their obligatory day off) and relatively quiet for the rest of the week.

The report on restaurant closures follows earlier concerns about the closure of town-centre shops and boutiques - over 50 in recent months, including some of the principal high street giants as well as smaller specialist boutiques.

Who is to blame? It is clear that many areas of the town centre are in decline and the local Council has done little to re-build and re-furbish some parts of the historic centre. Some of the nice buildings stand cheek by jowl with with neglected buildings. Structural collapses are not uncommon in the poorest areas.

There are the usual arguments with lack of parking compared with pedestrianistion and happily an ugly mutli-storey car parking in the principal square has been destroyed and the resultant Place de la République brought  back to life, with literally hundreds of people eating and drinking outdoors on the many cafés and restaurants.

The local authority has also noted the effect of having the local university (10 000 students) located out of town and there are plans to develop classrooms and other facilities in the centre for some 500 students, in an attempt to 'diversify' the population mix. All this is good news.

Source/ L'Indépendant, 25 September 2014.

French property market reviving?

Despite the many problems associated with the French economy (unemployment, reduced manufacturing output, out-of-control public spending etc) there are nonetheless encouraging signs of an improvement in the property market.

According to figures released by Notaires de France, which record actual sales completed, there were 740 000 property transactions in the 12 months to end of March 2014, a year-on-year increase of 12 per cent.

Overall prices of both houses and apartments dropped by just over 1 per cent, but there were significant rises in some specific areas, showing once again that the French property market is highly fragmented and cannot be judged as a whole.

In the case of houses, highest price rises were recorded in Nimes (12.3%), Nantes (6.8%), Marseilles/Aix-en-Provence (5.5%) and Montpellier (4.5%); and for apartments - Bordeaux (12.2%), Metz (8.3%), Tours (6.4%) and Nancy (3.8%).

With the pound sterling remaining strong against the Euro, now is a good time to buy French property.

 

Selling apartment without car parking space - tips and pitfalls

I am currently selling my apartment which does not have a car parking space (I sold it several years ago just after I moved in). However the buyer of my apartment needs a parking space and to buy one separately can be costly - as the transaction costs can exceed the value of the car parking space! It is just like selling any other piece of real estate and land registration charges apply, in this case based on a minimum cost which cannot be avoided.

Fortunately the agent handling my sale had a couple of car parking spaces on his books, and to help my buyer and alleviate the transaction costs, we have associated the car parking space (owned by another individual in my building) with the sale of my apartment, using the same contract.

Everyone was happy with this arrangement until, alas, we came to sign the compromis de vente or pre-contract, which had taken five weeks to prepare under the new Duffflot/Alur rules I talk about in the post below. At the last moment the owner of the parking space decided he did not wish to sell, and as a result the whole transaction collapsed - just as I was putting an offer on aother flat in a nearby town.

Despair and annoyance all round, until my ressourceful estate agent said he had another seller, with another car parking space on his books - and willing to sell! As a result our notaires are now urgently preparing a a new compromis de vente (the first one has had to be scrapped) and both the buyers of my apartment and the seller of the car park space have agreed to give power of attorney (in French a procuration) to save time and avoid unnecessary visits to the notaire's office, until we all meet again in a few weeks to sign the acte finale and complete the purchase.

I alerted the agent handling my purchase and happily its resolution, and my offer has been accepted, and the notaires are now also preparing the compromis for my purchase.

What started out as a gesture to help my buyer in the event could have led to the collapse of the whole transaction, but thanks to my agent we are now back on course. I know from experience that every transaction can be complicated and my own has been no exception!

 

Property searching

As well as selling my existing home, I am also starting to search for another apartment - this time away from the coast and in the nearest large town. Despite - or perhaps because of - the slowdown in the French property market there is a huge choice of small apartments of the sort I am looking for. And after a couple of frustrating weeks, literally overwhelmes by the wide selection on officer, I decided that in order to save time - and stay sane - I must revise and stick to my list of requirements. I hope it may help others caught up in a property search. My advice to myself is:

- Accept there is a huge choice, draw up a list of what is acceptable and what is not - and stick to your rules!

 - Best concentrate on one or two selected areas, get to know them through regular visits, and decide if this is where you would actually be happy to live. Visit at different times of day/evening, at weekends, literally check out you possible future neighbours!

- Look at For Sale boards (agents or private sellers), LeBoncoin etc and spend time looking at potential properties from the outside before even arranging a visit, to see how they fit into the area, and may put you off - a noisy street, a bar opposite, absence of parking etc. These are the sort of things you cannot change, and you need to decide if they are unacceptable or you could live with them.

- Look at the general condition of the property - outside painting, state of the front door, are there hastily printed names next to the doorbells indicating high turnover of occupants etc. Look at the state of Windows and curtains, also cars parked outside (always a reliable indicator).

- My practical half tells me I should buy a ground floor property (looking ahead to old age etc) so I tell myself to stop dreaming of attics and lofts!

- How small? How large? Given that every square metre costs money in taxes, charges and heating bills, be realistic about how much space you really need. Maybe now is the ideal time to review how much 'stuff' you own and start paring down your possessions.

- Looking ahead, just in case, is the property resellable? I like atypical properties - former shops or workshops, lofts etc - but atypical properties need atypical buyers if you have to sell in the future.

- Agents' détails often miss out the most important things and even before visiting you need to have your own checklist - what floor is the property on, taxes, management charges, future works planned for which you will have to pay, are the building managers a large company or is the property managed by a group of volunteer residents?

And when you finally get to look Inside:

- Remember that floors, walls and ceiling can be changed; a new kitchen or bathroom installed - factor in these potential costs.

Good hunting!



 

Apartment sale (2)

Further to my post of 30 May below, I am now in the process of selling my apartment under the new regulations required by the loi Duflot/ALUR , which requires the vendor provide a lot of additional information about the property, some of which was normally made available only at the signature of the acte finale (final document completing the sale) but which now has to be available to the potential buyer before he/she signs the compromis de vente (or pre-contract) and is asked to make a down payment on account, normally based on 10% of the sale price.

As noted below, the new procedures can delay the preparation and signature of the compromis de vente by, according to some estimates, 4 to 6 weeks - leaving the vendor in a position of uncertainty as to whether he has a genuine sale or not. As I wish to buy another property as soon as my present one is sold, it is difficult to agree any firm offers as my purchase will depend on my sale. Working closely with my agent and in cooperation with the buyer, we have taken the following steps which I would recommend to others involved in selling their apartment within  a co-ownership (copropriété) building:

1. I have confirmed with the syndic (building managers) that the charge they will make for supplying the documents required related to the history and management of the building - this will be made of a charge of €400 frais de mutation (change of ownership of the apartment) and an additional €250 for providint eh remaining documents.

2. I have signed and the buyer has countersigned a 'letter of intent to buy'  (lettre d'intention d'achat) which sets out the main terms and conditions that we are asking the notaire to include in the comromis de vente, including:
- Détails of the buyer and seller, description and address of the property
- Confirmation of the sale price including the agent's commission
- Confirmation that the buyer intends paying cash and is not seeking a bank loan or mortgage (this ensures that his cooling-off period (droit de réflexion) will be just seven days after signature of the compromis.
- Confirmation of the likely timescale for preparation and signature of the compromis and if all goes well, final completion.

This is very helpful for me as vendor and once the compromis is signed and a deposit lodged with the notaire, I am in a better position to start looking for another property and making a tentative offer using the above procedure. As my buyer does not wish to move in until early September, I am hoping to complete my purchase to coincide, thus avoiding the need to put my furniture in storage, and hopefully I will move directly from my old apartment to my new one. Fingers crossed!

I will post more information over the coming weeks as it happens.



 

New law adds to cost of apartment sales

A new law, introduced in March as an extension of the loi Dufflot concerning apartments owned within a condominium ('co-propiété'), adds considerably to the costs to be borne by the owner anticipating a sale.

Peomoted ostensibly as an additional measure designed to protect incoming tenants or buyers, the new loi ALUR requires vendors to provide additional information about the management of the building, what works have been undertaken or are planned, details of charges and a three year history of 'the state of the building fabric' - information than can only be obtained from the professional syndic (building managers) who are charging - heavily - for providing this information from their files.

It should be noted that these new requirements are in addition to the expert survey ("expertises") that already have to be provided covering lead, asbestos, termites, electrical safety etc; and the recently added 'energy efficiency certificate'. The new law also requires this package of documents to be assembled and made available to the potential buyer before the pre-contract ("compromis de vente") is signed - and before any cash deposit is handed over, as a sign of the buyer's good faith.

Coupled with the delays being quoted of four to six weeks, this now means that vendors now enter a lengthy period of uncertainty even before the buyer has the right to invoke the traditional seven-day cooling-off period (which can in turn be extended to another six weeks or so if the buyer is seeking to secure bank financing for the purchase). The fact that these new procedures will dramatically slow down the transaction process, in a property market that it already stagnant, appears not to have occurred to the leglislators.

For vendors trying to sell their property and possibly move elsewhere, the additional costs are a serious deterrent and will result in price increases. It is difficult to estimate at the time of writing how much the professional syndics intend to charge for providing the additional information required. But I spoke to two agencies one of whom had been told 'about €400', while another was quoted 'between €600 and 1000' - by the same office of the same syndic (Foncia)! Toether with the expert reports and energy certificate, costs to vendors to present their property for signature of the 'compromis de vente' could be in the order of €2000 - a pre-contract that the would-be buyer may or may not be prepared to sign.

A further question to which I have had no satisfactory reply is, in the event that the buyer decides not to proceed with the purchase, who is responsible for paying the costs incurred to date - bearing in mind that no deposit has been taken, and buyer may not even have entered the cooling-off period at this stage. In addition he/she may have exercised their legitimate right to view and express their interest in one or more other properties, without commitment of any kind, meanwhile encouraging further owner(s) to prepare the document bundle in the reasonable expectation of a sale.

Note that the new laws concern only co-ownership properties such as apartments within a "résidence" or complex managed by a syndic. The costs are inevitably going to hit hardest those living in and trying to sell the most property - particularly as the documentation relating to the building complex is much the same when you are selling a 20m² studio or a five-roomed penthouse.  And it is not unimaginable to assume that the larger and poorer the building complex, the more voluminous (and costly) the building reports.

Comments by property professionals have been critical of the unpreparedness of the syndics to furnish this information. My own view is that what set out to provide additional protection for potential renters and buyers has become a nightmare for vendors, many of them desperate to sell and move on. The legislation in my view is sloppily conceived and drafted with little appreciation of its practical effects on the property market and on individuals trying to survive in a continuing depressed French economy.

 

French property prices in 2014 - mixed views

There appears to be a mix of views of where French property prices are likely to go in 2014, although contrary to populist views in the British press of untold bargains to be had, French predictions are considerably less exciting.

According to the most recent report* I have read, Standard & Poors predict an average fall of 4% and two major French banks - Crédit Agricole and Credit Foncier - between 4 and 5 per cent. The French estate agents association FNAIM talk of 'not more than 4%' though agency chains predict a more modest drop in prices - Century-21 1.8%, Laforet less than 2% and Guy Hoquet between 0 and 2%.

Historically, there were average falls of 3% in 2008 and 7% in 2009, but average rises of 10 and occasionally 15 per cent were recorded in some French cities during 2010. According to Notaires de France, the average fall in 2013 was 1.7% overall.

Transactions are still down on the average 829 000 recorded annually in the boom years between 1999 and 2007, with a total 723 000 transactions recorded in 2013, 2.7% fewer than in 2012.

As always, price rises and falls depend on numerous factors, such as the age, condition and location of the property; and no two properties may be the same even within the same area, even the same street. It pays to keep an open mind and listen to the advice from professionals on the spot.

* sofinscope.actu.orange.fr