Jumbojet

Buying A House In France. Whats The Direction Of Euro ?

18 posts in this topic

Hello experts
Ive just joined HPC and this is my first post on forum.
I've been researching buying a property in France but am trying to
make sense of the current turmoil with the Greek situation to work out where Euro/GBP exchange rate is headed.

For example - currently €100k is worth roughly £86k - €1 = 0.86.
If the current scenario of financial chaos in Greece and
possibly Italy threatening the Euro continues could you see the rate heading to 0.7 or lower ?
I know you haven't got crystal balls (or you would be v rich) but just interested in opinions.

Thanks
JJ

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My common sense says that since in the Euro zone they do not print money like in the USA or UK, the Euro should go up in value even if countries like Greece and Italy default, however a strong Euro will not be good for house prices, so in the end buying a property in France can wait.

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If France stays in the Euro with Germany and the Benelux counties then the Euro will probably rise significantly. If France leaves the rump Euro their currency will probably fall.

So in answer to your question, it may go up or down depending on what happens. I hope that helps :rolleyes:

[quote]My common sense says that since in the Euro zone they do not print money like in the USA or UK,[/quote]

Which will be true as long until they do print. In an effort to save the Euro they will probably sell every ones daughters, so printing will be no problem. Edited by Peter Hun

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Predicting exchange rates is crystal ball stuff at the best of times. In the current highly volatile situation it is nigh on impossible. You might as well toss a coin.

My advice is not to rush into property purchase in France. It is a falling market at the moment. Apart from this please bear in mind that French property is very difficult to re-sell even in the good times. I am talking years!

I would advise renting for a period in your chosen area. It may not even be the area you would finally opt for. This would give you complete flexibility and you can be poised to move at an optimum time of your choosing.

Often the gloss wears off after 2 years on average, so renting is a good option initially.

Good luck.

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[quote name='Alba' timestamp='1320678190' post='3170720']
Predicting exchange rates is crystal ball stuff at the best of times. In the current highly volatile situation it is nigh on impossible. You might as well toss a coin.

My advice is not to rush into property purchase in France. It is a falling market at the moment. Apart from this please bear in mind that French property is very difficult to re-sell even in the good times. I am talking years!

I would advise renting for a period in your chosen area. It may not even be the area you would finally opt for. This would give you complete flexibility and you can be poised to move at an optimum time of your choosing.

Often the gloss wears off after 2 years on average, so renting is a good option initially.

Good luck.
[/quote]

Thanks Alba - very sound advice.
In my case this is not a rush purchase but a decision made over a long period of experiencing France. The purchase when it happens will be cash from savings and any improvements that will be required will also be cash fed in over a couple of years - in other words it will be 100% equity and no borrowings.
It will be initially a project and to provide family/friends holidays and then later a bolt hole for retirement purposes. My family have owned over there now for near 20 years also.
You're right about the exchange rates - I just cannot make out what is happening so am just asking in case there's any strong opinions out there !
Thanks for the response...

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http://www.petitscailloux.com/

Why not use this French Property Tracker
Petitscailloux or littlestones
You can keep an eye on nearly 1.5 million properties that are for sale in France
Just glue and paste the entire link from Se Loger (its been changed)
Check out the bargain basement!
Not forgetting the famous 'Dead Property ' section
Check out your two local taxes that you will pay in France
Tax Hab only if you rent which includes the French TV license which has just gone up!
Tax Fonc for the owners plus Tax Hab including the TV license
French Health care you pay plus private top ups as well again you pay
Life insurance for funerals seeing as you are thinking of your retirement in France
They can be very expensive in France

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[quote name='Jumbojet' timestamp='1320682642' post='3170812']
Thanks Alba - very sound advice.
In my case this is not a rush purchase but a decision made over a long period of experiencing France. The purchase when it happens will be cash from savings and any improvements that will be required will also be cash fed in over a couple of years - in other words it will be 100% equity and no borrowings.
It will be initially a project and to provide family/friends holidays and then later a bolt hole for retirement purposes. My family have owned over there now for near 20 years also.
You're right about the exchange rates - I just cannot make out what is happening so am just asking in case there's any strong opinions out there !
Thanks for the response...
[/quote]

Agree with Alba, no use buying while the currency market is volatile. Especially if you are only going to use the place for holidays.
Why not rent instead? If you were buying today for 300K€ and the market drops by 10%, you've lost 30K€ already. With that sort of money you could rent a very nice place for a fortnight for every year for the next 15 years.
If you are intent in living all year round, the wise move would be to rent long term. For the moment. The French market is still in bubble territory , especially in Paris and the coastal towns in the south/west.
The govt has just announced the end of help for buyers of BTL new builds (loi Robien being the latest). This can only help deflate the bubble in the long run :)

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http://www.sayazo.com/

I forgot to mention sayazo another French Property Tracker for PAP.fr
You can check out how long property has been for sale also any price changes etc
:D

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[quote name='redwine' timestamp='1320773057' post='3172089']
http://www.sayazo.com/

I forgot to mention sayazo another French Property Tracker for PAP.fr
[b]You can check out how long property has been for sale[/b] also any price changes etc
:D
[/quote]
Usually about 5 years!

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[quote name='redwine' timestamp='1320773057' post='3172089']
http://www.sayazo.com/

I forgot to mention sayazo another French Property Tracker for PAP.fr
You can check out how long property has been for sale also any price changes etc
:D
[/quote]

Thanks RedWine - useful links.
I notice in your post on French Property that there is a downturn in prices due to the new CGT rules coming in. You specifically mentioned the Charente which is the area I'm specifically interested in.
I have been tracking several properties there for about 6 months now and have not noticed any fall in the advertised asking prices recently but imagine from what you say that owners are starting to consider offers greatly below the asking as they become anxious to sell. As you say could be a good time to get a good price !

For me the purchase is not about a financial investment that I can make money off but more having a place to call home that I can enjoy in the long term.
I can see the sense in renting if I were to be going there for long periods immediately but for the next few years whilst working I want a project to improve on and use as a bolthole whenever the fancy takes. Also my price range will be definitely be below Euro 100k - nothing expensive....
Presume from your comments that you live somewhere near Charente yourself - I would hope that you enjoy living there - any general advice on that area ?

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[quote name='Jumbojet' timestamp='1320835137' post='3172805']
Thanks RedWine - useful links.
I notice in your post on French Property that there is a downturn in prices due to the new CGT rules coming in. You specifically mentioned the Charente which is the area I'm specifically interested in.
I have been tracking several properties there for about 6 months now and have not noticed any fall in the advertised asking prices recently but imagine from what you say that owners are starting to consider offers greatly below the asking as they become anxious to sell. As you say could be a good time to get a good price !

For me the purchase is not about a financial investment that I can make money off but more having a place to call home that I can enjoy in the long term.
I can see the sense in renting if I were to be going there for long periods immediately but for the next few years whilst working I want a project to improve on and use as a bolthole whenever the fancy takes. Also my price range will be definitely be below Euro 100k - nothing expensive....
Presume from your comments that you live somewhere near Charente yourself - I would hope that you enjoy living there - any general advice on that area ?
[/quote]

I know that your question is directed to Redwine, but some points to consider.

If there is any wholesale 'CGT' sell off, which I doubt, it will be short lived. Buying on average is a 2 .5 month process. With the Xmas and New Year hols intervening, this will be extended. You would therefore really need to be buying now (today!) and pushing the notaire to complete the transaction asap.

The French mindset can be a perverse one. More so than UK sellers they are willing to cling on for years until they think they can achieve 'the right price'.

Your best bet would be UK sellers who want to return to the UK due to the fall in the value of the pound and thus the difficulties in making ends meet. However, with the volatility of the markets at the moment even they may be contemplating if the exchange rate will turn in their favour. Some pundits are predicting the end of the euro. It is worth checking out some of the expat sites where people are bemoaning their lot in terms of lack of, or no interest in their property.

Perhaps this latter point re the euro is yet another reason to keep your powder dry at the moment.

I am no expert by any means, but I do not see the French property market taking off any time soon.

An additional point to consider is the effect of inflation. You could possibly achieve some interest on your savings and with the French property market remaining static or even declining, French inflation will erode the value of your proposed property making it even cheaper to buy.

The other thing to bear in mind is that us Brits fall in love with rural properties with a piece of land. The French prefer newer properties that are not rural. You have to be careful that you can get your money back on improvements, as you may have a very limited re sale market as is happening at the moment.

However, I fully understand your desire to have a project and get your teeth into it. I have had my project, but I still have a hankering for old water mills but my wife would not wear it, and I she is the more level headed one really.

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[quote name='Alba' timestamp='1320853279' post='3173160']

The French mindset can be a perverse one. More so than UK sellers they are willing to cling on for years until they think they can achieve 'the right price'.

[/quote]

Its not perverse, its simply a lack of understanding of compound interest. Its similar with risk, people do not know how to calculate it so they completely misjudge it. People in many countries suffer the same lack of mathematical ability.

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[quote name='Alba' timestamp='1320853279' post='3173160']
I know that your question is directed to Redwine, but some points to consider.

Perhaps this latter point re the euro is yet another reason to keep your powder dry at the moment.

I am no expert by any means, but I do not see the French property market taking off any time soon.

An additional point to consider is the effect of inflation. You could possibly achieve some interest on your savings and with the French property market remaining static or even declining, French inflation will erode the value of your proposed property making it even cheaper to buy.

The other thing to bear in mind is that us Brits fall in love with rural properties with a piece of land. The French prefer newer properties that are not rural. You have to be careful that you can get your money back on improvements, as you may have a very limited re sale market as is happening at the moment.

However, I fully understand your desire to have a project and get your teeth into it. I have had my project, but I still have a hankering for old water mills but my wife would not wear it, and I she is the more level headed one really.
[/quote]

Hi Alba - good points well made.
As much as I would like to get something now I will be keeping "my powder dry" till I'm more confident of where things are headed. My only concern really is getting the best possible price and I will judge that based on market pressures and exchange rates/economics etc.
Once made I am certain it will be for the long term and not something to trade on after a couple of years. It is primarily something to enjoy life in and not something to make money out of. Once I have bought it for the best price possible I will focus on enjoying it and not wether it has gone up or down in value every year.
I smiled when I saw your comments about hankering for a water mill project. I get great enjoyment from creating a home having done several build / renovations both in the UK and in the Med. Yes -you sometimes need a level headed wife to counter your straining at the leash wanting to dash off and do another crazy idea ! :lol:

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[quote name='Jumbojet' timestamp='1320919701' post='3173898']
Hi Alba - good points well made.
As much as I would like to get something now I will be keeping "my powder dry" till I'm more confident of where things are headed. My only concern really is getting the best possible price and I will judge that based on market pressures and exchange rates/economics etc.
Once made I am certain it will be for the long term and not something to trade on after a couple of years. It is primarily something to enjoy life in and not something to make money out of. Once I have bought it for the best price possible I will focus on enjoying it and not wether it has gone up or down in value every year.
I smiled when I saw your comments about hankering for a water mill project. I get great enjoyment from creating a home having done several build / renovations both in the UK and in the Med. Yes -you sometimes need a level headed wife to counter your straining at the leash wanting to dash off and do another crazy idea ! :lol:
[/quote]

Hi Jumbojet,

Given current currency volatility and a falling French housing market, I think you have made a wise decision.

Re your comments on it being a long term proposition, experience has taught me that you should always have an exit strategy with most things, but particularly French property purchase. I am surprised how quickly the last 10 years have passed and our requirements and priorities have changed since our initial purchase.

If you really have the bit between your teeth the next 3 months are probably the best seasonally to buy in France, from a buyer's perspective. You could try a shotgun approach and travel to your desired area and make cheeky offers at around 30% below the asking price on a few properties. Someone may bite.

The immobiliers are generally having a lean time at the moment. You could easily knock around 60% off of their fees. I know of some even accepting 2% rather than the characteristic 10% - 12% of the sale price.

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[quote name='Alba' timestamp='1320922652' post='3173962']
Hi Jumbojet,

Given current currency volatility and a falling French housing market, I think you have made a wise decision.

Re your comments on it being a long term proposition, experience has taught me that you should always have an exit strategy with most things, but particularly French property purchase. I am surprised how quickly the last 10 years have passed and our requirements and priorities have changed since our initial purchase.

If you really have the bit between your teeth the next 3 months are probably the best seasonally to buy in France, from a buyer's perspective. You could try a shotgun approach and travel to your desired area and make cheeky offers at around 30% below the asking price on a few properties. Someone may bite.

The immobiliers are generally having a lean time at the moment. You could easily knock around 60% off of their fees. I know of some even accepting 2% rather than the characteristic 10% - 12% of the sale price.
[/quote]

The cheeky offers is something I was thinking of. As you say - might get a bite !
Presume you've had a place in France for 10yrs + ? Are you living there full time or 50/50 with UK ?
What has changed with your requirements - I mean have they been changed because of French red tape / taxes etc or just a need to upsize/downsize ?
I'm looking primarily at the Charente region - main considerations for that were borne out of familiarity:
a. good weather
b. easily commutable from UK from regional airports in midlands with short flying times so possible for a long weekend initially
c. really like the geography, the towns, markets, activities etc.
d. good value property
Overall - there are lovely places all over Europe but the one thing for me that France has is its closeness to the UK - and that's never going to change !

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[quote name='Jumbojet' timestamp='1320924948' post='3174015']
The cheeky offers is something I was thinking of. As you say - might get a bite !
Presume you've had a place in France for 10yrs + ? Are you living there full time or 50/50 with UK ?
What has changed with your requirements - I mean have they been changed because of French red tape / taxes etc or just a need to upsize/downsize ?
I'm looking primarily at the Charente region - main considerations for that were borne out of familiarity:
a. good weather
b. easily commutable from UK from regional airports in midlands with short flying times so possible for a long weekend initially
c. really like the geography, the towns, markets, activities etc.
d. good value property
Overall - there are lovely places all over Europe but the one thing for me that France has is its closeness to the UK - and that's never going to change !
[/quote]

Yes we have had a place in France for about 10 years.

Initially we considered living there permanently, but started off 40/60 UK/France.

Gradually over the years our stay has reduced. I suppose essentially because we have explored over a very wide area and have become a little bored with things French. As costs rose and our time there reduced we began to query the wisdom of maintaining two homes.

We have traveled quite widely over the years but we now want to have the flexibility of exploring new and possibly more long haul destinations. We do not want to be tied anymore to one particular area, although we covered a wide area as we did frequently travel into Spain and Italy whilst located in France.

If you are considering being in the Charente during the autumn and or winter, you may want to check the weather stats a little more closely. We are close to the Med and it can even be quite cool in the autumn and winter that far south. We wanted the longer season.

We did initially consider buying in Perigueux or Cognac, but we were drawn further south because of the climate

We are now considering moving around and taking short rentals. We no longer want the responsibility and costs of maintaining a home at a distance. However, it is really nice when you arrive at your French property and you immediately settle in with everything to hand. The other side of the coin is that after a while the familiarity makes you feel as though you have simply exchanged the routine of one area for another. If you know what I mean?

Despite a sometimes love/hate relationship with French living, we will always treasure our experiences of France when we move on.

We will never ever regret buying in France, because it probably saved my wife's life. The NHS fobbed my wife off with what they considered was a minor problem. A French doctor was much more thorough and probably saved her life. We will definitely miss the speed and ease of access to the French health service.

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[quote name='Alba' timestamp='1320941961' post='3174359']
Yes we have had a place in France for about 10 years.


We have traveled quite widely over the years but we now want to have the flexibility of exploring new and possibly more long haul destinations. We do not want to be tied anymore to one particular area, although we covered a wide area as we did frequently travel into Spain and Italy whilst located in France.
---------------------------------------------------------
If you are considering being in the Charente during the autumn and or winter, you may want to check the weather stats a little more closely. We are close to the Med and it can even be quite cool in the autumn and winter that far south. We wanted the longer season.
---------------------------------------------------------
Despite a sometimes love/hate relationship with French living, we will always treasure our experiences of France when we move on.

Hi Alba
I think we have been the opposite having lived in Australia, Africa, Cyprus and travelled and worked extensively in a lot of other places also . Right now the place in France feels right but you never know what the future brings and maybe the feet will itch again one day.
I would prefer to be further South for the weather and I would love to buy in Provence but it comes at a price so I feel that Charente is a reasonably good option.
Glad to hear that your wife is ok and hope you have great travels - its a big exciting world out there - especially if you have a few quid in your pocket !
Funnily enough - as I type this I'm listening to the financial news reporting that France is starting to be dragged into the Euro crisis - wonder how that will pan out ?!
JJ

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Hi,Does anybod yknow if you sell a house in France: do you still pay same amount of CGT and the new tax introduced by the government,if you upgrade to a bigger house in France?Or

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