In common with other European countries, 2012 has been a tough year for the French property market with a falling number of sales and lower prices. Our Chief Executive, Trevor Leggett, has been quoted in the press as saying:
“Overall we expect there to be around 650,000 properties sold in France this year. This is lower than in 2010 & 2011 but still well above the 594,000 sold in 2009.
Both the FNAIM and the Notaires de France are now reporting that prices across France will have fallen between 1-2% in 2012. Of course this “average price” statistic is fairly meaningless as France is made up of hundreds of smaller “micro-markets” some of which will weather the storm better than others.
The key to 2013 will be the attitude of vendors and agents towards pricing – if they are sensible and understand that prices have fallen in line with overall consumer confidence then we see no reason for transaction numbers not to remain similar in 2013. However, if vendors and agents don’t price sensibly then volumes could drop again, it’s still a buyers market and we all have to recognise this.
The latest figures from BNP Paribas showed that sales to international buyers had dropped off slightly but that these buyers had bigger budgets. We see this trend continuing and have certainly noticed a change in our buyer profile with more families looking to move to France. Families need larger properties and often have bigger budgets as they are less reliant on savings and the pension system – the BNP Paribas figures gave an average purchase price of €265,000 for international buyers and we wouldn’t be surprised to see this rise towards the €280,000 mark in 2013.
The Government has promised to “re-introduce fairness to the heart of the tax system” and this does have implications for international buyers. There was a short lived media frenzy after the announcement of plans to make international buyers pay social charges on rental income and capital gains but this doesn’t seem to have affected our sales this year – after all, if French residents are taxed in this way then surely it’s fair for overseas buyers to pay the tax as well.
It’s clear that France is not necessarily the most tax efficient home for entrepreneurs looking to make a fast buck. However, the fact remains that it is the most visited country on the planet and 79 million people a year (and rising) can’t be wrong. We have 37 UNESCO sites, some of the safest & prettiest beaches in the world and ski resorts to suit all needs. The best wines come from France and we have the food to go with them. In troubled times it pays to buy in established and prime areas and France can be considered just about the most prime country in the world.
We have two tips for 2013. The first is french farmland. The average value of agricultural land in the UK is currently £6,073 an acre or £15,182.50 per hectare. At an exchange rate of 1.24 euros to the pound that equates to over €18,800 per hectare. Compare this to agricultural land prices here in France. SAFER figures show that untenanted farmland cost an average of €5,430 per hectare last year – that’s almost one third of the price. The price of Englishfarmland has rocketed by more than 10,000% in the last 60 years and France certainly gives farmers a cheaper (and sunnier) option.
Our second tip is Alpine ski property. The Leggett ski team has seen a 300% increase in sales this year and mid-market buyers are back in the market for the first time in six years, with budgets of between €400-800,000. We see this trend as continuing with increasing demand from international buyers within this price range”.