Rise in French property prices in regions favoured by overseas buyers
Despite the well publicised stock market instabilities and eurozone debt crisis property prices in France are rising, especially in regions favoured by overseas buyers.
ata for the past 12 months from French Notaires, shows that prices increased in Paris, the Cote D’Azur and Bordeaux regions. The rise was strongest in Paris, which recorded a 23% increase in prices and a 2% increase in the volumes of sales.
In the Bordeaux area prices rose by a more modest 3.5%. Activity in Provence and the Cote D’Azur was also encouraging, with a 6% rise over the past 12 months.
Data produced by mortgage bank BNP Paribas showed a stronger growth in sales, with volumes rising over 20% across France as a whole, and prices growing by between 4% and 8% on average.
According to independent UK regulated mortgage brokers Offshoreonline.org, it shows that France has not suffered the same shocks as other European property markets such as the UK, Spain and Portugal.
‘These statistics will come as a shock to many UK buyers who probably expected the French market to be contracting in the same way that prices generally are in the UK, with the exception of London,’ said Offshoreonline.org managing director Tim Harvey.
‘However, it is important to note that French banks are traditionally more cautious in their lending than their UK counterparts and so France has simply not suffered the same violent shifts in property values that affected the UK, market moves which we now know were unsustainable,’ he explained.
As in the UK, region is a significant factor, so whilst the average price rise over the last year has been just under 5%, in some regions such as Franche Comte in the East, the rise was a more modest 1.8%, in upper Normandy it was below 4% and in Lorraine it was below 3%.
Reflecting in part the UK’s economic performance, the proportion of buyers from the UK has dropped from 14% of all purchases in 2008 to 11% last year, but UK residents are still the third largest overseas buyers of property in France.
Tim Harvey feels this might be about to change again. ‘Commentators refer to the value of sterling which has been volatile and of course affects the real price a UK buyer will pay. However, over the past three years, the sterling/euro exchange rate has not moved by a huge amount in absolute terms, so today’s exchange rates are broadly comparable to the position in late 2008 or early 2009,’ he said.
‘With property prices showing strength and rising again, we believe many buyers who have been waiting on the side lines will now come back into the market,’ he added.