We have just put up our Christmas decorations in the office, which should mean that business starts to slow as everyone prepares for the holidays. Not in 2019 though. And not for the last 3 consecutive years either in fact.
After a marked downturn in 2015, activity has remained more or less constant in the French property market ever since. The FNAIM (the principal professional real estate body in France) is forecasting house price increases of 3.4% for the last quarter of 2019, with the trend continuing into 2020. A steady demand, coupled with decreasing supply and consistently low interest rates meant that in the 12 months leading up to March 2019, there were more sales transactions in France than at any point in the last decade (a total of 985 000).
The French bank Credit Agricole agrees with FNAIM, with equally positive predictions for 2020. According to their studies, the volume of sales, as well as house prices will continue to increase in 2020. While the economic crisis of 2007/08 affected the French property market, France was not as badly affected as other European countries. Price reductions between 2008 and 2010 in France were moderate compared to those seen in Spain, Portugal and others, thanks predominantly to the structure of the French mortgage market, as in France almost 85% of borrowers take out fixed rate mortgages. This makes the French housing market less prone to sharp upturns and downturns than markets in other countries.
According to Bloomberg, what makes 2019 a particularly interesting year in terms of French real estate investment is that it can be categorized as a “post speculation phase” meaning that prices have bottomed out, and are slowly rising again. Investors are not trying to speculate on when house prices will reach their lowest point, and furthermore, demand is out-stripping supply. These are all the signs of a healthy real estate market for investors and buyers, who can feel confident that their property will increase in value as we enter into 2020.
The Notaires.fr website predicts a steady growth in prices, stabilizing at around 2.6% by the end of 2020 (a slightly lower prediction than the FNAIM, but not by much).
By all accounts, while the French real estate market certainly suffered post 2007, it didn’t collapse. The French property market has been shown to be relatively robust, and stable enough to withstand temporary periods of decline, added to the fact that it is one of the most well-regulated property markets in the world.
A few weeks ago, we wrote a blog-post about British buyers, and the relative lack of effect that Brexit has had on their purchasing behavior in France. In fact figures show that property sales in France to British nationals increased in 2018 (over 2017), and British buyers remain the largest group of international buyers of real estate in France. Belgians come in next, and then Scandinavians (who pay the most).
The experts are predicting it, and we are seeing the activity on a daily basis… 2020 is going to be a good year for investors in the French real estate market.
Contact us for any of your property purchase or sale questions in the South of France.
Tel: +33 (0)4 92 59 25 93
Email: cannes@fineandcountry.com
* With over 18 years of experience, we offer an in house turn-key property solution on the French Riviera and into Provence, including a full buyers search service, accompaniment through the entire purchase process, property management after purchase, and rentals. Additionally, we have established trusted partnerships with English speaking mortgage brokers, currency experts, lawyers, financial advisors, banks and more; all of whom we would be delighted to introduce you to, to facilitate your property purchase in the South of France.
We look after your property investment on the Cote d’Azur, as if it were our own, and if you want to hear it straight from the horse’s mouth, this is what Diane F had to say: After trying various agents in the area, I was recommended to Fine & Country, and within just a few short weeks they secured a buyer & we completed the transaction with the minimum amount of fuss for my property on the Cap d’Antibes. Alice Watson-Smith was always on hand to guide us through the journey & everything happened very quickly & efficiently. Thank you Fine & Country.
Sources: FNAIM, Notaires.fr, Credit Agricole, INSEE, Banque de France, BNP Paribas, Bloomberg, www.french-property.com