In their latest housing market report the French estate agents association FNAIM report that property prices fell by 1.7% in the first quarter of the year. This is considerably lower than in many other mature real estate markets.
The figures shows that in France average house prices are now 11.2% lower than they were 12 months ago, whilst the price of apartments has dropped by 8.4%. This means that property prices are the lowest they have been since the end of 2004 but this is encouraging property investors.
In the first quarter prices increased overall slightly in January but fell back again in February and March. So what does this mean for the French property market?
Some analysts re predicting further price falls of between 5 and 10% for the rest of 2009 but when you speak to property professionals there is considerable optimism.
Estate agents report that there are more buyers around that in the first quarter of 2008 as prices are more realistic. Sellers have accepted that they need to be prepared to negotiate on the price. Interest rates in France are also dropping quite sharply, so house purchase has become affordable for a larger number of potential buyers.
Indeed international agency Winkworth has just opened another office in the South of France in Antibes. Winkworth has found that demand along the coast from Antibes towards Cannes retains a special allure for buyers either looking for principal or secondary properties on the Côte d'Azur.
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Prices for first class properties in prime locations continue to retain their premium, according to David Lee, Franchisee of Winkworth Antibes. 'Many vendors are accepting some margin for price negotiation. This means that opportunities now exist to purchase both villas and apartments at more realistic market values,' he said.
But it is not just foreign buyers. Lee has had considerable interest from French investors seeking a second home. 'Its sunny, the sky is blue and the sea is sparkling so who wouldn't want to buy. However, property in this area is gilt edged. Prices boomed in recent years and now sellers need to be more realistic. But property by the sea or with good views will sell,' explained Lee.
Such is the confidence within Winkworth that it plans further expansion in the South of France. 'To open a new office in such a prime location in these recessionary times highlights our commitment to France and confidence in the market, particularly in such a cosmopolitan area as the Côte D'Azur. Opening an office is Antibes is to be followed by others along the coast and inland over the next few years,' said David King, Managing Director of Winkworth France.
The French real estate market has fared better than many other in Europe, according to Tobias Just, head of real estate research for Deutsche Bank Research in Frankfurt. Paris in particular has held its own, with prices in many parts of the city falling only about 10 percent since the market peaked
According to Yolanda McCafferty, an agent with Vivre à Paris, a real estate company that specializes in helping foreigners buy and rent properties in the city, British and Americans are still buying although there are a growing number of Italians, Russians and South Americans interested in real estate.
When it comes to the western side of France the Manche region of Normandy is seeing more sales than other parts. Belgians and Dutch buyers are showing a lot of interest buying holiday homes in the region as it is easy to reach for them. The French are also buying second homes in Normandy. But the economic downturn has hit British buyers who were traditionally the largest group in this part of France.
'Normandy, especially Manche, is selling the most at present,' said Ivan Tredinnick, co-director of Bacchus Immobilier that has a team of agents from Normandy down to the Pyrenees.
'It is a buyers market and they want to negotiate a discount. It is the lower end of the market that is selling. Anything over €1 million is not moving and the €400,000 to €600,000 sector is sluggish,' he explained. But he is confident that the market is picking up elsewhere with sales also improving in the Charente.
Brittany is also holding up well according to Matthieu Cany of Sextant Properties. Second home buyers are still keen on the area. 'It is the smaller, budget properties that are selling. It is a lifestyle decision rather than for investment. Buyers are choosing lower priced properties, going for two bedrooms rather than three so that they can have the second home that they want,' he explained.
Indeed the global financial crisis does not seem to have had a significant impact on international property investors according to survey by French Banks BNP Paribas.
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It reports that there is a strong confidence in the French housing market, with over 90% of buyers from overseas who bought property in France in the last three years considering their property a good medium to long term investment.
There also seem as many who intend to invest further in French property, as those who propose to sell. It found that 73% of buyers had no intention of selling up in the foreseeable future, with only 9% certain to sell and 19% undecided about the future. While a third expressed further interest in investing in French property in the future.
The survey also confirmed what many previous surveys of French property buyers have also shown, that it is the appeal of the laid back lifestyle in France that is the main reason for buying property in France.
