French Property - Price Increases For 2008

[amoflaherty]

We bought a detached house in the Perpignan area (South East France) 2.5 years ago. We recently improved it significantly by spending over € 30,000 An agency has valued it recently for less that we originallybought it!. We plan to keep it and retire there, so we don't really mind.

Our neighbours, who are french, had their house valued €50,000 less that a smaller house in the neighbourhood who was sold a few monts ago, after having been in the market for amost a year. Our neighbours think that the agencies give now low valuations a they get desperate to shift houses. They wouldn't mind selling it at a lower price, but they think that other homeowners are in denial and would not reduce their selling prices to a more realistic level. Hence they will not be able to afford buying another one.

Penny Pound

I can't say that I am surprised if you are talking about dept 66 (pyrenees orientales). It is a lovely area with beach and mountains etc. We looked there approx 2 years ago and were shocked by the prices - very over inflated and clearly priced for foreign buyers. We were dealing with agency beautifulsouth - just had a look now at their website and property from 2 years ago still for sale. The denial phase will pass once foreign buyers stop paying over the odds and reality sets in - the strength of the EURO I think will quicken this reality check especially for UK buyers/sellers.

[whiterabbit]

My friend lives near Annecy and is convinced that prices are still rising!

Ant one got ant information on that area?

I was just there, its a more solid area and market. Plenty of jobs and close to Geneva and Lyon helps keep things stable, Not sure about increasing though more like static.

[wadisgod]

I was just there, its a more solid area and market. Plenty of jobs and close to Geneva and Lyon helps keep things stable, Not sure about increasing though more like static.

thanks for that

[freemarket]

I had been considering retiring to France and have been looking around Perpignan for over a year - prefer Sorede or surrounding foothills.

A local agent told me that prices fell around 4% in 2006 and in 2007. In recent visits it is clear there is a lot of flexibility on all properties - agents are talking of 10% off asking price deals falling through because of lack of mortgages. This implies an immediate price flexibilty of c10% on most properties.

I have to admit there is a lot of rubbish property in France - old sheds extended poorly with the aim of selling to a Brit with no brain - such properties are to be avoided!

There are many properties still around which were advertised over a year ago - so selling is a diffiult job and prices are too high. I suspect the over supply of villas and the price collapse in Spain is making Spain a relatively attractive alternative - maybe this is causing a gradual drawn-out decline?

I am also aware of new markets opening up - Croatia, Turkey, North and West Africa for example, as well as the Middle East - especially the Middle East makes South of France a poor cousin. So France gets left in between the super rich and the relatively poor.

I also wonder if people are having difficulty servicing holiday homes bought with Euro loans out of £ pay packets which are less secure. The £ cost has gone up and the expected capital gains in Euro terms are being depleted by price falls and although offset by the £ falling, the £ gains must be diminishing as well as Euro prices fall.

I am being advised there are fewer UK buyers going to France - but those who have retired there, stay there.

house prices are falling everywhere!

[librarising]

Interesting thread. It seems the world is waiting to see how far prices will fall, including even the phlegmatic (property-wise) French.

Here's my experience in case you're interested:

We bought a flat in Nice three and a half years ago. Asking prices have appreciated about 40% since then, and remain steady. Nice is both a working city and a holiday destination with little room to expand, and prices have been pretty high there long-term.

In the last few months I have noticed many more properties appearing in agents' ads. Like about a four-fold increase. This may partly be simply because agents are feeling nervous (if not desperate) and so are working harder - a feature of the French property market is that properties for sale appear in many agents' adverts, as I think there's to some extent a free-for-all once a property is advertised. They get 4-5% on sales! Flats in Nice have in the time I've been looking generally tended to stay on the market for a good while before sale, but I've seen a few that have been up for six months or more, and new ones keep appearing.

So Nice is worth watching as a traditionally quite steady market under some downward pressure. It will be interesting to see how far prices eventually yield to this.

Rents in Nice by the way are quite high relative to non-Riviera locations... but are low relative to prices, and have not risen with the price rises I have mentioned. 800 euros a month will get you a quite nice spacious two-bed flat in Nice, just as it did four years ago - I wonder if this suggests some bubble qualities in prices? (for such a flat, typically about 280K euros is being asked now). Wages are not that high in Nice, though, and many lets are to students, which I think tends to keep rents steady.

Our flat is let but we actually intend to live there eventually; I wouldn't recommend Nice as a buy-to-let opportunity at current prices. But then of course you'd have to be brave/foolish to buy any property anywhere just at the moment unless forced to by circumstances.

Edited May 7, 2008 by librarising

[whiterabbit]

Interesting thread. It seems the world is waiting to see how far prices will fall, including even the phlegmatic (property-wise) French.

Here's my experience in case you're interested:

We bought a flat in Nice three and a half years ago. Asking prices have appreciated about 40% since then, and remain steady. Nice is both a working city and a holiday destination with little room to expand, and prices have been pretty high there long-term.

In the last few months I have noticed many more properties appearing in agents' ads. Like about a four-fold increase. This may partly be simply because agents are feeling nervous (if not desperate) and so are working harder - a feature of the French property market is that properties for sale appear in many agents' adverts, as I think there's to some extent a free-for-all once a property is advertised. They get 4-5% on sales! Flats in Nice have in the time I've been looking generally tended to stay on the market for a good while before sale, but I've seen a few that have been up for six months or more, and new ones keep appearing.

So Nice is worth watching as a traditionally quite steady market under some downward pressure. It will be interesting to see how far prices eventually yield to this.

Rents in Nice by the way are quite high relative to non-Riviera locations... but are low relative to prices, and have not risen with the price rises I have mentioned. 800 euros a month will get you a quite nice spacious two-bed flat in Nice, just as it did four years ago - I wonder if this suggests some bubble qualities in prices? (for such a flat, typically about 280K euros is being asked now). Wages are not that high in Nice, though, and many lets are to students, which I think tends to keep rents steady.

Our flat is let but we actually intend to live there eventually; I wouldn't recommend Nice as a buy-to-let opportunity at current prices. But then of course you'd have to be brave/foolish to buy any property anywhere just at the moment unless forced to by circumstances.

You bought at the right time I think in Nice. We had a good look there and Villerfrance and figured we would be better off waiting a bit for things to cool. I notice a few UK agents have set up show in Nice now and are trying to talk up the market big time.

[davidg]

My friend lives near Annecy and is convinced that prices are still rising!

Ant one got ant information on that area?

Annecy is about to be connected to Geneva by a new autoroute (toll road), this has boosted the market as salaries in Geneva are about double those in France after tax (although no job security, 20 days holiday + retirement at 65!). However I doubt they are rising much now. Certainly the notaires in Briancon (equivalent of the land registry) have posted a 2.5% loss for 2007. I'll try to find the Annecy figure. In Grenoble about 80km to the south there are virtually zero tranactions at the moment - worst market for 20 years according to my estate agent friends.

You should be very careful about investing in France. A couple of the big leaseback operators have gone bust in the last couple of years. Transmontagne in particular has left many British and Irish investors destitute. There are also very high costs in buying and selling - about 20% in the worst case for stamp duty and estate agent fees. The French are also pretty canny at ripping off unsuspecting Brits.

As for 60K appartments overlooking the Seine, not anywhere where you would risk your ass living I'm afraid. Central Paris is as expensive as London these days and the burbs are either as expensive if commutable or totally impractical to commute. Some places are about as safe as Basra.

Edited May 13, 2008 by davidg

[davidg]

You may find this interesting before investing in France

http://www.dailymotion.com/video/x26s8i_gr...ons-baisse-de-p

be very careful. even in the "chic" areas of Paris there has been a fall over the last Q. although YoY figures are up. Lille increased by 6-7% in 2007 but most areas are showing small drops.

[whiterabbit]

Annecy is about to be connected to Geneva by a new autoroute (toll road), this has boosted the market as salaries in Geneva are about double those in France after tax (although no job security, 20 days holiday + retirement at 65!). However I doubt they are rising much now. Certainly the notaires in Briancon (equivalent of the land registry) have posted a 2.5% loss for 2007. I'll try to find the Annecy figure. In Grenoble about 80km to the south there are virtually zero tranactions at the moment - worst market for 20 years according to my estate agent friends.

You should be very careful about investing in France. A couple of the big leaseback operators have gone bust in the last couple of years. Transmontagne in particular has left many British and Irish investors destitute. There are also very high costs in buying and selling - about 20% in the worst case for stamp duty and estate agent fees. The French are also pretty canny at ripping off unsuspecting Brits.

As for 60K appartments overlooking the Seine, not anywhere where you would risk your ass living I'm afraid. Central Paris is as expensive as London these days and the burbs are either as expensive if commutable or totally impractical to commute. Some places are about as safe as Basra.

Many thanks for this great and detailed information. It really seems like now is not a good time to buy anything at all.

[kitkat]

Many thanks for this great and detailed information. It really seems like now is not a good time to buy anything at all.

Interesting views on buying in France. One point that is overlooked are the properties near the main airports. Something to seriously look at if prices do start to go down. http://www.hiday.net/news.html?newsid=220

[kcsunshine]

Would this include the Cote du zure

[Phillip Temple]

I work for one of the English-speaking property services in Nice, Med In Heaven. Personally I think Nice is going to be slow but steady over the next year. The English are the main foreign buyers here and the drop in sterling has had a strong psychological impact. We have less enquiries than usual at the moment and some clients are hesitating as they wait to see what the sterling will do next. However sales remain relatively steady and prices are still creeping up.

I would say our clients have evolved from a split between investors looking to buy-to-let and those wanting a second home toward more the latter. librarising mentioned that the rental prices they saw years ago still appear to be the same today. I feel this is true for long-term rentals and it seems immune to the laws of supply and demand. A good long-term rental property is actually quite hard to find here. They are definitely being depressed by low wages and high unemployment.

Most foreign buyers do seasonal lets as you can rent per week what you would normally charge per month for long-term (plus you avoid the problems caused by French law over-protecting long-term tenants). There was a burst of buy-to-let coming on the market a few years ago and it is more competitive than it used to be, but despite that one rental agent I was chatting to last week told me he was so over-booked he started charging summer rates from February and was still fully booked until October. Possibly other agents will have different stories as the quality varies greatly. Some are just downright lazy.

Would I recommend currently investing in Nice? I would say yes only in that I do not see that much has changed for those that wish to invest in here. People that buy here tend to because they like the place. Those wanting high capital appreciation will invest in higher-risk countries such as Bulgaria. It does not give the best yield in the world as regards rentals, it is pretty average. However it gives reasonable returns on both, and is safe and steady. I would say that if you like Nice then it is still a safe investment you can thoroughly enjoy, prices will slow but I doubt they will drop, and can let out easily whenever you need to cover costs.

Take your time and try and pick up a bargain. I do not think the market will really start picking up again until after September, when English investors have seen whether sterling has stabilised or not. Do not be afraid to put in a low offer and make the owner sweat a bit. The agencies are starting to panic a bit here and will be anxious to make the sale. You can use this to your advantage. Finally do not take an estate agents word on whether somewhere is a good buy to let here, talk directly to a rental agency that you would actually use for a realistic appraisal.

Feel free to get in contact with us if you have any questions.

Phillip.

[picnic]

Make no mistake.Prices are falling in France generally as has been reported by the pfrench press in the last few months.

I would expect at least 15% over the next couple of years . So the best thing to do is move over and rent ,happy in the knowledge that you will be ablre to drive a harder bargain in 2 years time.

Google, fniam ,pap.fr...le monde nouvelle observatoir.....etc the is plenty of evidence if you speak french.

[rosebarn]

It would be nice to think property in France is going up but we are desparate to sell and so far our agents are reporting the market is completely dead.

Have now resorted to listing our longere on ebay to try and drum up a bit of advertising ourselves!

We are selling in France to try and buy a house here on Dartmoor but so far can't even afford a garage!

[Phillip Temple]

It would be nice to think property in France is going up but we are desparate to sell and so far our agents are reporting the market is completely dead.

Have now resorted to listing our longere on ebay to try and drum up a bit of advertising ourselves!

We are selling in France to try and buy a house here on Dartmoor but so far can't even afford a garage!

Hi rosebarn, it would help everybody if you could tell us where your property is. picnic makes the rather random prediction that prices are going to drop 15% then start going up again in 2 years, but from what I have been reading each area in France is reacting differently. The Cote d'Azur seems to be rising very slowly, yet in the south-west I have been reading of a standard offer being 20% below asking. Your anecdotal evidence could help us get an idea what is happening in your area.

I know the developers in my area have been reacting sharply. An HSBC report I read recently predicted new builds were in over-supply by about 15% and were expected to drop in price by 10% by end 2009 until the excess is soaked up. All the major players renovating apartments in Nice sold all their products months ago and are not doing any more. In fact they are trying to offload the last of their products 'as-is' in their un-renovated state. Now would be a good time if anyone wants to take on a 'project' as (i) you could pick up a good deal off a developer and (ii) you are no longer in competition with the local developers as un-renovated products come onto the market.

Phillip.

[jacki rackson]

good thinking sold property is the best way to put extra money instead of investing money in market. so good thinking i am also think about. Keep it up.

------------------------------

real estate new london ct , real estate groton ct , real estate waterford ct

[rosebarn]

Hi rosebarn, it would help everybody if you could tell us where your property is. picnic makes the rather random prediction that prices are going to drop 15% then start going up again in 2 years, but from what I have been reading each area in France is reacting differently. The Cote d'Azur seems to be rising very slowly, yet in the south-west I have been reading of a standard offer being 20% below asking. Your anecdotal evidence could help us get an idea what is happening in your area.

I know the developers in my area have been reacting sharply. An HSBC report I read recently predicted new builds were in over-supply by about 15% and were expected to drop in price by 10% by end 2009 until the excess is soaked up. All the major players renovating apartments in Nice sold all their products months ago and are not doing any more. In fact they are trying to offload the last of their products 'as-is' in their un-renovated state. Now would be a good time if anyone wants to take on a 'project' as (i) you could pick up a good deal off a developer and (ii) you are no longer in competition with the local developers as un-renovated products come onto the market.

Phillip.

Hi there

Our property is in Morbihan, which is the warmest, most southernly part of Brittany.

See here on ebay!

We've already dropped the price twice. Trouble is even if we sell now, then put that with our savings and we still can't afford anything in Devon!

I reckon we'll probably hang on to it if it doesn't sell this summer.

The agents have told us that the market is now "just about picking up". Probably all the brits heading overseas fed up with stupid house prices.

Prices might be coming down in England but it seems they aren't dropping anywhere as fast as they went up!

[Loggy]

Hi there

Our property is in Morbihan, which is the warmest, most southernly part of Brittany.

See here on ebay!

We've already dropped the price twice. Trouble is even if we sell now, then put that with our savings and we still can't afford anything in Devon!

I reckon we'll probably hang on to it if it doesn't sell this summer.

The agents have told us that the market is now "just about picking up". Probably all the brits heading overseas fed up with stupid house prices.

Prices might be coming down in England but it seems they aren't dropping anywhere as fast as they went up!

Ever the optomists, estate agents !

[Chris1]

I work on one of the biggest French Property websites www.francepropertyshop.com and it has been interesting watching the way in which the market has changed over the last year.

Last summer, properties were selling fast and prices were strong, especially in the most popular areas. Strangely, even though people were talking about a crash in the market at the end of last year, we noticed that prices stayed stable well into this year and it wasn't until the Euro really increased in strength that sellers started dropping their prices.

However the initial drop that we saw in properties selling wasn't anywhere near as large as people has predicted and indeed it now seems to have levelled out and started to increase again on our site. I feel that along with the strength of the euro in recent months, one of the main problems has been people and even the media, talking the market down. This has caused a a negative air around the French Property Market when really the state of the market remains strong.

We are now seeing a noticeable increase in buyers from the UK market visiting the site to find property in France and are receiving more and more feedback from private sellers who have now sold their properties. As many people have already mentioned in this thread, the price of houses in the UK remains ridicously high compared to the French market and the number of UK buyers looking for property in France continues to grow.

For any sellers out there who are currently marketing your properties to local buyers only, I would strongly recommend targeting to UK and international buyers as this opens you up to a much larger number of people searching for French property, especially useful if you are looking to sell without lowering the price of your property. There are many ways to do this, either through an agent that utilises websites and magazines to target UK or international buyers or by listing your property for sale privately. This can be done cheaply and easily and can prove to be a very effective way to find a buyer.

Further information regarding tageting your property to the UK market can be found by clicking the link below...

http://www.francepropertyshop.com/advertise.aspx

[wadisgod]

I work on one of the biggest French Property websites www.francepropertyshop.com and it has been interesting watching the way in which the market has changed over the last year.

Last summer, properties were selling fast and prices were strong, especially in the most popular areas. Strangely, even though people were talking about a crash in the market at the end of last year, we noticed that prices stayed stable well into this year and it wasn't until the Euro really increased in strength that sellers started dropping their prices.

However the initial drop that we saw in properties selling wasn't anywhere near as large as people has predicted and indeed it now seems to have levelled out and started to increase again on our site. I feel that along with the strength of the euro in recent months, one of the main problems has been people and even the media, talking the market down. This has caused a a negative air around the French Property Market when really the state of the market remains strong.

We are now seeing a noticeable increase in buyers from the UK market visiting the site to find property in France and are receiving more and more feedback from private sellers who have now sold their properties. As many people have already mentioned in this thread, the price of houses in the UK remains ridicously high compared to the French market and the number of UK buyers looking for property in France continues to grow.

For any sellers out there who are currently marketing your properties to local buyers only, I would strongly recommend targeting to UK and international buyers as this opens you up to a much larger number of people searching for French property, especially useful if you are looking to sell without lowering the price of your property. There are many ways to do this, either through an agent that utilises websites and magazines to target UK or international buyers or by listing your property for sale privately. This can be done cheaply and easily and can prove to be a very effective way to find a buyer.

Further information regarding tageting your property to the UK market can be found by clicking the link below...

http://www.francepropertyshop.com/advertise.aspx

Call me a sinic but I guess its your web site or you have a house or two to sell!!

Edited July 17, 2008 by wadisgod

[stumpy]

Hi - curious to know how your viewing trip went. Can you post any analysis on state of the market from your trip experience - which region did you visit ?

Hi in a word dire and getting worse. I have a number of friends in France with property to sell including people with jobs out there. They are to the point where they are including the preferential exchange rate into their calculations when pricing their property.

The new rules on residency and health insurance top up cover are also scaring the pants off them. Dont forget the inheritance laws as well. Yum yum gonna buy around April next year when the prices hit rock bottom in my opinion.

Am talking about Brittany but am hearing same things about most areas. The agents in France have always shoved the overpriced properties to foriegn buyer which is worth noting. You need to look at the French agents sites not the translated for English sites o or uk agents sites.

[stumpy]

I work on one of the biggest French Property websites www.francepropertyshop.com and it has been interesting watching the way in which the market has changed over the last year.

Last summer, properties were selling fast and prices were strong, especially in the most popular areas. Strangely, even though people were talking about a crash in the market at the end of last year, we noticed that prices stayed stable well into this year and it wasn't until the Euro really increased in strength that sellers started dropping their prices.

However the initial drop that we saw in properties selling wasn't anywhere near as large as people has predicted and indeed it now seems to have levelled out and started to increase again on our site. I feel that along with the strength of the euro in recent months, one of the main problems has been people and even the media, talking the market down. This has caused a a negative air around the French Property Market when really the state of the market remains strong.

We are now seeing a noticeable increase in buyers from the UK market visiting the site to find property in France and are receiving more and more feedback from private sellers who have now sold their properties. As many people have already mentioned in this thread, the price of houses in the UK remains ridicously high compared to the French market and the number of UK buyers looking for property in France continues to grow.

For any sellers out there who are currently marketing your properties to local buyers only, I would strongly recommend targeting to UK and international buyers as this opens you up to a much larger number of people searching for French property, especially useful if you are looking to sell without lowering the price of your property. There are many ways to do this, either through an agent that utilises websites and magazines to target UK or international buyers or by listing your property for sale privately. This can be done cheaply and easily and can prove to be a very effective way to find a buyer.

Further information regarding tageting your property to the UK market can be found by clicking the link below...

http://www.francepropertyshop.com/advertise.aspx

Your an Eenglish agent matey. Tough in France is it. You know its more expensive to market with a u.k. agent because the French agent just puts their fee up. Get a life and advertise in a more proffessional way instead of peddling your wares on here..

[Agentimmo]

I work on one of the biggest French Property websites www.francepropertyshop.com and it has been interesting watching the way in which the market has changed over the last year.

Last summer, properties were selling fast and prices were strong, especially in the most popular areas. Strangely, even though people were talking about a crash in the market at the end of last year, we noticed that prices stayed stable well into this year and it wasn't until the Euro really increased in strength that sellers started dropping their prices.

However the initial drop that we saw in properties selling wasn't anywhere near as large as people has predicted and indeed it now seems to have levelled out and started to increase again on our site. I feel that along with the strength of the euro in recent months, one of the main problems has been people and even the media, talking the market down. This has caused a a negative air around the French Property Market when really the state of the market remains strong.

We are now seeing a noticeable increase in buyers from the UK market visiting the site to find property in France and are receiving more and more feedback from private sellers who have now sold their properties. As many people have already mentioned in this thread, the price of houses in the UK remains ridicously high compared to the French market and the number of UK buyers looking for property in France continues to grow.

For any sellers out there who are currently marketing your properties to local buyers only, I would strongly recommend targeting to UK and international buyers as this opens you up to a much larger number of people searching for French property, especially useful if you are looking to sell without lowering the price of your property. There are many ways to do this, either through an agent that utilises websites and magazines to target UK or international buyers or by listing your property for sale privately. This can be done cheaply and easily and can prove to be a very effective way to find a buyer.

Further information regarding tageting your property to the UK market can be found by clicking the link below...

http://www.francepropertyshop.com/advertise.aspx

Cris my man, last summer - apart from the top end of the rental/investment market, most property was starting to fall. Prices were so strong that you could negotiate 10% under the listed price Today, you can start at 20% below, so I guess it's all relative.

As for increased demand from the UK ? Given the dire situation of sterling, this is surprising! People I know tell me that the Brits, Italians and Germans are all selling up if they can to cash in on the high prices now.

As for targetting UK and International buyers instead of the locals??? This has been the tactic for EA's for the last 3-4 years as most locals are now priced out of the market. eg. 90% of appartments in Nice last year were from buyers outside of the town. There are whole swathes of recently built or new builds that locals will not touch with a baguette The international buyer now in the market is looking at the very top end or a gaff in the old town centres.

Cheapest and easiest way? Lower the price. To save even more on EA fees, go to www.pap.com and sell it yourself. Very reasonable fees, easy to use/register and is the biggest online site of its kind in France. No EA's

My moles in the business , working in local banks and credit companies tell me the market is now falling fast. Very few buyers for lots of sellers and a lot of EA's will shut or have already.

For those looking to buy - wait a while. For those that can't wait, start negotiating at a VERY low price until the seller bites

[aliveandkicking]

I found this data on a french blog.

http://www.bulle-immobiliere.fr/friggit.html

Amazing how French UK and US property costs are so very closely correlated

[picnic]

I stand by my comments of 15% falls..(in France ).in fact it could be somewhat more !

Obviously it will not be the same everywhere....it will be worst where the Overseas buyers have been active as they have acounted for up to 10% of the whole market.

Visit PAP.fr ( where people offer AT LEAST 10% below asking prices ) and start reading the press or better still the internet as it is more up to date. But the comment about reading the native press, not the drivel purporting to be factual, being offloaded onto unsuspecting Brits by the English press, could not be more relevant.

There are more rampers turning up trying to keep their businesses alive...(can't blame them for that I would do the same )

but ''blaming the messenger'' is just not going to work.

It seems blindingly obvious to me from the posts on this thread that now is NOT the time to buy.