In the wake of the Brexit decision almost one week ago, many of our clients and colleagues have had a number of questions for us regarding our predictions for the Real Estate market in France. Below are the most frequently asked questions, and our comments “from on the ground”:
1.)Many buyers and sellers may think this is not the time to buy or sell because of Sterling’s problems and widespread economic uncertainty – what do we say to them to persuade them otherwise? Or do we say ‘sit on your hands until stability returns…’?
What we have found is that those people that really want to buy in France, and equally, those who really want a change of lifestyle – are following the path they have chosen and are not letting the current turbulence shake their dream. Many of our clients have also arranged with our currency partners to fix exchange rates ahead of time, so that they are not as affected by the current volatility of the Sterling and currency market. So, although the Sterling has taken a knock, which may or may not be temporary, it is possible to secure a rate that is the best available today, and hedge that bet.
We say, keep the faith.
France, Paris, the Sunny South and Snowy Middle have been destinations of choice since the 19th Century, and wars and recessions have come and gone before. Brexit will cause an array of problems for governments to solve over time, and there will be endless debate, but the dream-homes, the second homes and property investments, will always be there for those who can afford it and who want to follow their dreams.
There will be no change in the laws on foreign ownership for British buyers, and to reassure them that they are not alone there are thousands of Australian, American and other non-EU owners of all manner of properties in France from bedsits to castles. Not being part of the Union actually changes little regarding ownership. Tax laws around rental income remain as they are (very low at an effective 10%), and capital gains tax was rationalised in 2015 so that EU and non-EU members pay the same.
What may happen is that prices might rise in choice destinations such as Paris and the French Riviera if foreign investors who have flocked to London and the UK as a member of the EU decide that they would rather put their cash into property elsewhere when Britain goes solo.
Add to all of the above that interest rates for non-French investors are extremely attractive and will remain so for the foreseeable future, that even if Article 50 is triggered by an incoming Prime Minister investors have another two years (minimum) of status quo, and there will be no retrospective penalty or changes in conditions for people who are already invested.
‘Fortune favours the brave’ is an old Latin proverb that applied in those way-off times, and likely applies today. Certainly, our advice to clients is not to jettison their plans, but to continue, and most will.
2. For those who haven’t let the Brexit decision influence their own plans and who want to buy now, what is the market like in France for holiday homes?
The market for holiday homes in the South of France remains strong, it is an incredibly popular location for buyers from around the world due to it’s convenience in terms of location, excellent lifestyle and cuisine, guaranteed sunshine for most of the year and beautiful scenery. Scandinavians, Americans, Australians, Middle Easterns, Egyptians, Russians and of course, the British, are just some of the nationality’s who have recently bought holiday homes through us on the French Riviera. While the market was sluggish in 2013 and 2014, we have seen a marked change over the last 18 months with sales figures dramatically better in 2015 and 2016 – which is starting to turn the market again and prices will start to increase.
3. Do these market conditions change in different regions of France?
Yes, France is about 4 times the size of the UK and with that there is huge variation in terms of property value and desirability of location. On the French Riviera, while the market was difficult for a few years, it was able to keep relatively stable, similarly to Paris, during the toughest times. Now that the market has turned the French Riviera is leading the way as savvy buyers recognise the attractive prices of properties which are currently available and the low interest rates, which together have created the perfect opportunity for buyers looking mid to long term in one of the most sought after regions of Europe to buy property.
Some examples: Here are 3 fabulous villas in Provence that present excellent value in the current market, all priced at circa €795 000, which at today’s exchange rate* is circa £ 655 000 or US$ 880 000. All located under 1 hour to Nice airport, with sun drenched pools, Provencale views, charming local towns within walking distance and undeniable French charm:
Saint-Cezaire-sur-Siagne, Provence (€790 000)
Gonfaron, Provence (€795 000)
Callian, the Var, Provence (€795 000)
*Source of exchange rate on 29 June 2016 from www.xe.com. The GBP and USD rates quoted in this article are subject to change with the fluctuations of the currency market, therefore please refer only to the Euro price, which is the mandated asking price for each property.
For a complete listing of all the properties we have available for sale on the French Riviera and in Provence, please visit our website www.fineandcountry.com/fr or email us firstname.lastname@example.org