How is the market performing?
Over the last 24 months we have seen a remarkable reversal in France’s prime residential markets stemming largely from a strong Paris market where prices increased by some 12% in 2017. Against a positive economic and political backdrop, France is now experiencing a buoyant and incredibly exciting residential rebound.
“L’effet Macron”, as witnessed since the summer of last year, has caused a ripple of optimism from Paris to the internationally sought after regions including the Côte d’Azur, Provence, the Alps and South West France, all of which have witnessed a strong turnaround in sentiment, buyer interest and transactional activity.
Who’s buying in France?
International buyers continue to be the driving force of prime residential sales. The lull following the EU referendum proved only momentary; with the British demographic once again accounting for up to one in four prime residential purchases.
The remaining 75% of buyers typically stem from northern Europe (Benelux, Switzerland, Scandinavia) along with French domestic buyers who account for around one in five of our prime buyers. Buyers from the Middle East, the US and even Asia are also displaying a greater appetite for French real estate.
Where are the hotspots?
France is fortunate to have many hotspots – from beautiful cities and charming hilltop villages, to glamorous beaches and award winning ski resorts. Our carefully considered associate network of offices across France, covering Paris, the Côte d’Azur, Saint Tropez, the Luberon and Alpilles, Gers, Espace Killy, Les 3 Vallées, Megève and Chamonix, are the local experts in these very hotspots.
The international appeal of these destinations ensures a constant flow of eager tourists which helps to underpin the underlying market values – perhaps the key reason as to why real estate demand continues to grow in these destinations (with enquiry numbers up 100% compared to 2016).
What type of property is in greatest demand?
The popularity of different kinds of property depends a great deal on location. In Paris, traditional properties with grand proportions and period features are most in demand, while the preference in the south of France is typically for a local architectural vernacular with a more contemporary interior twist.
Budgets vary accordingly, albeit the majority of our buyers look between €2 and €5 million and seek elegant, turnkey ready accommodation with manageable gardens and ideally a breath-taking view.
In contrast, in the Alps demand is frequently focused on new-build properties, with off-plan developments representing 80% of the Alpine homes sold across our network last year.
The advantages of buying off-plan in France are multiple and might include staggered payments, the most advanced construction techniques and materials, a 10-year guarantee, and a possible VAT rebate of up to 20% for those open to a rental solution.
What’s your outlook for 2018?
The confidence that was cultivated in the market during 2016 continues to gain momentum and as France celebrates a record 2017 when over one million properties changed hands, we expect transaction volumes to rise further.
Against a backdrop of historically low interest rates, rising house price inflation, growing economic and political stability, France looks to attract global wealth that will allow its real estate markets to thrive through 2018 and beyond.
Indeed, as global uncertainty prevails, France and its rich cultural tapestry remains an attractive and compelling investment and lifestyle choice.
Source: Knight Frank
What should you do?
Whether buying a holiday home or rental property now is the time to buy in France. Get in touch with HB Property for unbiased mortgage advice and holiday rental expertise.