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Not a good time to buy...?


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I am currently in a position where I could buy a property if I wanted but it strikes me that for non-owners, now is a great time to save for buying a house in the future.

 

Interest rates going up mean more money / interest on your money (my saving are in the UK gaining 5% gross).

When you need to buy a house you will need to borrow less because you will have a larger deposit - which means that you will be less adversely affected by higher interest rates on the credit.

 

Housing market starting to look "stabalised" - certainly there is more uncertaincy! A lot of people (e.g. president of Particular a Particular) think a "correction" is just around the corner - the fact that it didn't happen when they thought (and prices rose yet again in double-digtis) just seem to think that it is more likely soon!

 

With the election year coming up in France there is also a lot of debate about the homeless problem and providing more accomation. Both candidates are looking to rapidly increase the supply with new-builds and special laws are liklely to come into being to force owners to rent out empty properties or be forced to pay extra charges (as in Spain). At the same time, immigration numbers are beginning to slow down unexpectedly, and (especially in the in the UK!) as interest rates are likely to be increasing, people are running into difficulties and may be forced to sell holiday homes (which may cost a lot more to keep as well when new laws come in).  

 

All these factors point to an increase in supply of properties for rent and sell in the next few years against a climate where demand is not increasing at the same rate (estimates by insee suggest population rate increasing at about .5% / year up to 2030).

 

Perhaps I will be totally wrong, but I think the risks or buying are not worth the rewards of saving for the next few years.

 

Any thoughts?

 

-Rob-
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Rob, are you talking about buying in France and/or the UK?  I can’t speak for the UK, as I don’t have a foot in both countries. Mine are firmly in Languedoc for the time being. 

Re France

In your assessment, you do not appear to have taken regional variations into account. If the French economy doesn’t pick up, it’s possible that more and more young people will continue to flee the rural areas in search of work hence increasing demand in towns but an even greater surplus in rural areas.  Also, projections show –irrespective of the state of the economy – that certain regions will continue to have a dearth of good affordable housing in the years to come due to their popularity.

Fnaim and others have been issuing contradictory reports for well over a year and a half. I know because I have a friend in Paris who has been waiting for the famous crash to buy but, in the meantime, prices have simply continued to increase in the popular areas even if there has been a decrease in the rate of that increase. He has been sending me these contradictory articles for over a year and I had to tell him to stop and decide to buy or belt-up (I’m a very gentle friend[:-))]). He was only trying to convince himself and wasting a fortune on rent in the meantime.

 I would also take the fantastic pre-election promises re new builds for social housing with a bucket of salt. These things will need to be financed by a stronger economy. Very little detail in the election bla bla about how they are going to achieve this.

In terms of passing new laws to force landlords to rent, this being France, they will soon after pass another law to mitigate the first as none of the landlords will pay any attention and it won’t make a blinding difference. You may not know this but there are already sooo many incentives for landlords to rent their empty properties in the worst hit regions. Around me, there are fabulous apparts (80-160 sq metres) empty or barely used and despite the municipality’s attempts, landlords do not like the red tape and so do not rent out. The solution may be to liberalise the market but can't see them having the nerve to do that. So, they will pass even more pointless laws.

This country is too vast and diverse. The little I know about the French housing market, I believe that your research should be more region-specific. The generalisations may work in the UK (perhaps) but not convinced it can be applied to France due to the different social factors and home ownership patterns. So, if you are considering buying in France, it’s probably a good idea to take your chapeau melon off before you decide on how to invest your no doubt hard earned cash.

Just a few thoughts.

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I would think, if you have the money available, it would be a very good time to buy in France, as it is a buyer's market and you could "make quite a low offer" somethings the French are not too keen on and far removed from the days when we bought in 2003 when you had only a chance to secure a property if you payed the full asking price and signed there and then on the dotted line. I would love to be in a position to buy now, there are some amazing bargains around.

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Thanks for the replies so far.

Of course I am aware there are many many variables involved in the housing market and that there are huge regional variations (for instance for the population projections, the languedoc-Roussillon region is estimated to grow by 32.2% by 2030 but the Champagne-Ardenne region is estimated to reduce by 5.5%!). There is certainly a trend of "moving to the suburbs" (perhaps linked with needing more space after the baby-boom) in place. I live in central Paris and work in the suburbs and so a suburbs move would be a logical step for me too (unfortunately!). I would like to buy as I pay 1050 euro's a month rent (but live in a  property which would probably cost around 450000 to buy!) but "it's all about timing". 

I have also seen the articles about "good time to put offers at 20% lower" ;

 

and of course there are more studies out saying house prices are due to fall ;

 

 

(but there have been for years!)

 

I really do feel this will be a big year in terms of changing sentiment about property - I would think that isolated holiday areas are most at risk as this article points out ;

 

 

I may well have a look around and test the market with some reduced bids but I really do think that we are over the crest of a wave and that it's best to sit out and see what happens - maybe some very reduced bids will be accepted in a couple of years!

 

Just my thoughts!

 

-Rob-
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Thanks for those links Crevette, I’ve just emailed them to my friend in Paris. Should make him happy to see the ''anglo-saxons'' are now talking about a decrease in France.    

Like you he pays silly rent for a small place in the 15ardt and would prefer to buy. He has been monitoring the market for a few years and I have to say that a lot of the French articles he has emailed me had predicted doom and gloom initially for 2005 and then for 2006 but the crash still hasn’t happened.

Good to see you have more scale to negotiate though but surely that will also depend on the suburb. How much negotiating can you do on a property in St Germaine-en-laye or Neuilly, I wonder?

Your first post was rather vague. It wasn’t clear whether you were looking to buy to live in, a holiday home or an investment property and in which region.

From a British perspective, I think certain regions of France will always be reasonable  but it depends too on what the property is destined for. If someone pays 250K for a property and prices fall, what is the big deal if that person has purchased it to live in?  Can’t say I’d care a jot if someone told me that my home had dropped in value, I’m living in it so that’s that.  Of course, it's different if it's an investment property.

The one big difference between the British and French markets that is not mentioned in the articles is that it's really not uncommon for the French to sit on a property for years until they get the price they want.  Someone I know, simply rented out his place when he failed to get what he wanted after a couple of years of trying to get his exhorbitant asking price. It's a completely different approach to property than that of the UK.

Like my friend in Paris, it sounds as if you need somewhere to live. As a local resident, you know your area and so are clearly the best judge.

Good luck!

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The big problem with the reports in the British press is that they tend to be based on small samples of agents etc dealing mainly, if not exclusively, with British buyers. And the writers seldom really understand the French market anyway - it is definitely very different from the British.

In NW France the market is pretty flat, though there have been signs for a while that it is improving. I'm told that sensibly priced houses in the sub-120,000€ bracket seem to be selling reasonably well, dearer ones are pretty slow, there is still a demand for the wreck-in-the-field type of place. Over-priced places, particularly abandoned renovations, are definitely not easy to sell.

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[quote]I would

like to buy as I pay 1050 euro's a month rent (but live in a  property

which would probably cost around 450000 to buy!) but "it's all about

timing".
[crevette][/quote]

Try looking at it this way - effectively you're paying 2.8% on a 100% "interest-only" mortgage (IOMs do exist here, according to a mortgage broker I spoke to last year, albeit they are very rare) and you are saving on Taxe Fonci\ere, some insurance and (probably) some maintenance/repairs. You can walk away from your "mortgage" at no cost with (at most) three months notice but don't have the "option to buy" that you get with an IOmortgage.

There are all sorts of reasons to buy and all sorts of reasons to rent but "cheap as chips" is usually a fairly good indicator of which way to go if you have the choice.

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I think the most fortunate people at the moment are the ones who decided to buy in the recent past and have been importing money in the last month. At €1.51 to the pound they have probably made extremely good savings, and I hope the rate stays around there for the next few months until it's my turn to bring in the cash.

Specualtion about the housing market in the UK should be based on 2 simple truths, the present cost of housing is unsustainable, and will be further aggrevated by the massive increases you will see in the upcoming years in council tax rates. The only bright spot may that the fat jock may raise the stamp duty level in the near future. What is also always true is that when the bottom drops out of the housing market, taxes and rates will not drop by the same proportion, and I see nothing but misery coming up. even with a Conservative Government in power the damage is going to take too long to repair to produce any instant effect. Any increases in savings rates will be eaten up by all this, and will probably be taxed anyway.

Which is why being stuck with a reduced financial state after an early retirement has prompted a move to Normandy, We have decided to buy a property that is in many ways very similar to that which we have here in Devon, except it has a huge cellar and terrific garden as well, and it is half the cost. As for all the whinging about taxes and inheritance laws, that also has a simple reaction from me, if you have it it will be taxed, if you don't they won't, and and if your kids haven't sorted themselves out by the time you peg out, thats their problem. Stop clinging to it and live your life, you will be a long time dead, and you won't need any money for it.

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Pugwash, I think you have hit the nail on the head.  We have no idea how long we're going to have or how fit we are all going to be in the future.  Prudence re house prices is very sensible but ultimately, go for the life which you'll enjoy the most.  Come to France because you want to be in France, not because it is financially prudent to do so at a particular time. Do your homework? Absolutely.  Get a proper idea of how much you will have to live on/what things will cost?  Absolutely.  But whether you will be happy wherever you make your home depends upon a good deal more than financial considerations.
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one word of caution, pugwash, if you will not think me cheeky and speaking out of turn.  have you spent winter in normandy?  i have spent winter in devon AND normandy and i don't need to tell you that normandy is several degrees colder and has considerably more snow. 
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Thanks for that Copperlola, the decision to move to France was not just on financial motives but the facts I have already stated made it a very easy decision. Something else I did not say that also helps me with the decision, is not having to pay the BBC for it's propoganda driven news organisation. I know I will have to pay the French for probably the same thing, but it will be less and I can live with that.
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Sweet dix-sept, we actually were in Normandy just 2 weeks ago when they had enough snow to block the motorway, it's not a problem, in fact my wife commented on how it was more comfortable than here because the atmosphere was less damp.  I should also point out that over the last few years I have been working in the Czech Republic and Poland during the winter, if you think it's bad in Normandy you don't know you are born.

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[quote user="pugwash"] Something else I did not say that also helps me with the decision, is not having to pay the BBC for it's propoganda driven news organisation.

Ehhhhhhh? You've lost me here.

I know I will have to pay the French for probably the same thing, but it will be less and I can live with that.

Ehhhhhhh? Still lost.

[/quote]

Re succession laws

I know we can't take it with us but if I only have a tenner left when I do kick the bucket, I prefer to decide where and to whom it goes.  I don't need some govt to make that decision for me based on 200 year old laws. I sincerely hope to outlive those daft laws in any case[6].

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Sorry to confuse you L/Gal, I am talking about the TV License, most of which seems to be appropriated by the BBC news department to run an alternative version of the Guardian newspaper, and has become a beacon for Champagne Socialists.

As for the inheritance business if you still have £10 left when you go, that's bad planning ! serves you right [:P] [:D]

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We live in Normandie but je suis Gallois and born and brought up in the Rhondda Valley.  Please forgive me but I can remember 1963 winter wise and the winter of 1947 is long in the memory of my family.  Normandie winters (as much as I hate them) do not compare.  I also lived once in Devon fairly near Dartmouth and where I had a wonderful cottage overlooking the Dart.  I lived in the heart of Worcestershire in a 17th century granary I lived in a Georgian house in Chepstow.

In all of those times I was concerned as to house inflation and the like I was worried about market conditions and interest rates. I was also under the cosh by my then employers and one day in North Wales then back to Chepstow and then down to Truro and then back to HQ in London.  Targets to meet profit forecasts in line with expectation.  Still it was generally good fun.

Here the house is a place within which to live and to enjoy each others company with the dogs and the chickens it it goes up or down value wise it does not matter I live here and whilst we are moving from Normandie it is due to medical illness of my wife and the need to be near a very good Rheumatolgist.

I have commented before that I do not have children but my wife does from two previous marriages.  Thus if I remain after my wife the French state gets 60%.  Does that matter for they are protected in the UK with other investments.  We as a nation tend to get hung up on what we leave to others in the form of assets and of course the notices in the Times and Telegraph showing what one has left continues to provoke comment.

We are comfortable here in France this is where both the mind and the heart is.  If I have to think about whether it is wiser to buy today or to leave it a while whilst interest rates at 5% accumulate back in the UK then sorry I think the prospect is mind boggling.  Life is for living. 

When I did my first degree I also wanted to be a lawyer but the lure of commerce was stronger then and I thus chose the monetary route and for the protection of my then marriage.  However the law never went away and later in life as a mature student I went back to University did my second degree and then into the law.  I never want to go out in this life be it a pine or if they can afford it oak box and to think 'I wish I had done this or that...........'

The biggest problems of today are to get to the post office before it closes to organise something that goes with the fresh crab for tonight what wine goes with it and to order my new butchers block for the new house and whenever and wherever that will be.

Final point Crevette and particularly in reference to your 5% rate of interest.  There are better deals in the market..................I know so for that is where some of our assets are but they are ring-fenced not for us but for the children or Linda's children.

As long as I can afford to live the way I have chosen is fine by me.  If I need to raid some piggy boxes to do that then that is exactly what I intend to do.

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[quote user="LanguedocGal2"]

Re succession laws

I know we can't take it with us but if I only have a tenner left when I do kick the bucket, I prefer to decide where and to whom it goes.  I don't need some govt to make that decision for me based on 200 year old laws. I sincerely hope to outlive those daft laws in any case.

[/quote]

But this what happens to people in the UK who die intestate - which is the bulk of people.  My closest friend lost her husband and had to wait for months living hand to mouth while probate was granted etc.  Then under the UK  rules of intestacy she then had to watch while her two teenage sons spent (in the space of less than twelve months) a substantial part of the assets that she and her deceased husband had worked hard to accumulate.  As I recall each son spent roughly the value of a modest detached house - with absolutely nothing to show for it at the end.

Granted, for those that do plan, the french system is worse, but th UK system is far from perfect.

Kathie

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[quote user="pugwash"]

Sorry to confuse you L/Gal, I am talking about the TV License, most of which seems to be appropriated by the BBC news department to run an alternative version of the Guardian newspaper, and has become a beacon for Champagne Socialists.

You'll gonna looooooooove France[:-))]

As for the inheritance business if you still have £10 left when you go, that's bad planning ! serves you right [:P] [:D]

You may have a point. I'll organise for the tenner to be in my hand as I take my final breath.[:)]

[/quote]

Hastobe, I think it's irresponsible not to leave a will. In France, the govt decides for you and that's what I object to.

Agree with Mr L, if you wait for the 'best' moment to buy, you could wait forever. The friend I mentioned above has lived in Paris for 10 years and seen prices go up by over 50% in the areas he likes. If they fall now by 20%, that still means an increase of 30% plus the rent he has paid over that time.  Over the last couple of years, he has realised that waiting for the best moment to buy has cost him a small fortune. 

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L/Gal,  I know what you mean when you say I am going to loooove France, but at least their socialism is up front where you can see it, not like the pseudo socialism that we have at the moment, and look like we will continue to have with the Fat jock probably going to get promoted. It will be interesting to see what the Sarkozy effect will be in France. He might even sort out the inheritance problems eventually !.

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[quote user="LanguedocGal2"]

Hastobe, I think it's irresponsible not to leave a will. In France, the govt decides for you and that's what I object to.

[/quote]

I agree - but I don't think she anticipated being a widow at 26!  If you don't have a will then, as in France, the UK government decides who inherits.

On the subject of 'the best time to buy' - we have always bought houses on the basis of what we need as a family / couple.  Although concious of making wise fiancial choices - the need to 'make money' has alway been secondary.  After all if you are living in the house its just paper money and only of any value if you downsize - which with three kids was always a long way off for us.  Much more important were factors such as quality of life, environment, schools etc (which, I guess, drive prices).

Like some who have already posted, our choice to buy in France was partly driven by: the lower house prices which will allow us to release capital and so have better quality retirement, our love of France and a desire to be in a warmer (or more acurately a drier) environment due to my health issues.  I'm sure the value of our French house will go up (and quite possibly down) over the years we will own it but the changes are irrelevant.   Our only frustration atm is that our retirement is still 4 years off and in the meantime we are not getting the use out of our house that we would like - and for that reason only we wonder if we bought at the 'right time'.

Kathie

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[quote user="hastobe"]
But this what happens to people in the UK who die intestate - which is the bulk of people.  My closest friend lost her husband and had to wait for months living hand to mouth while probate was granted etc.  Then under the UK  rules of intestacy she then had to watch while her two teenage sons spent (in the space of less than twelve months) a substantial part of the assets that she and her deceased husband had worked hard to accumulate.  As I recall each son spent roughly the value of a modest detached house - with absolutely nothing to show for it at the end.

Granted, for those that do plan, the french system is worse, but th UK system is far from perfect.

Kathie
[/quote]

Blaming the UK rules for those who choose to die intestate is unfair. If your friend and her late husband had not wanted teenage but presumably adult (sic) children to squander the money they should have taken action to prevent it.

One of the few certainties in life is death. We all know it is going to happen and have adequate time to prepare for it.

The French system is different, but well documented, and is one of many factors to be taken into account before moving. If concerns as to what happens to my money when I shuffle off is important to me then responsibility rests with me to do something about it.

John

not

 

 

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Kathie,  I do not know anything about your circumstances, but have you really looked at it?, when I was forced out of work last year 6 years early at that time, I was in a panic because I couldn't find another equivalent job, and I knew there was no way I was going to stack shelves at Tesco at the behest of a snotty 22 yr old with 2 gce's, so I really had to look at my circumstances, and I found that with the obvious trimming of expectations I could afford to stop work if we moved to France (actually I would be even better off if we wnt to Bulgaria or Brazil, but you cannot go too far from the grandchildren). Having resigned ourselves to the lower expectations we find we will be reasonably comfortable with enough fallback, and we are now looking forward to settling down in Normandy and seeing out our time in a lovely garden surrounded by fruit and not trees, with regular visits from family, and still able to go back ourselves a couple of times a year.

Give it some thought

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[quote user="pugwash"]

Sweet dix-sept, we actually were in Normandy just 2 weeks ago when they had enough snow to block the motorway, it's not a problem, in fact my wife commented on how it was more comfortable than here because the atmosphere was less damp.  I should also point out that over the last few years I have been working in the Czech Republic and Poland during the winter, if you think it's bad in Normandy you don't know you are born.

[/quote]

pugwash

yes, it's true, i DON'T know about cold.  even in the uk, i have only ever spent time in the effete south  and anywhere north of the watford gap is a foreign country to me.  i do love devon (and somerset) but i still think that if it was a toss-up between devon or normandy, i too would opt for normandy.  discounting everything else, the romanesque architecture in normandy is to die for.

as for your subsequent remarks about the bbc, i couldn't agree more.  lord reith would be spinning like a top in his grave now if he knew the sort of wall-to-wall reality tv programmes and the other sort of "chewing gum for the eyes" stuff that pass for entertainment on the bbc these days.

sorry to highjack the thread, but just wanted pugwash not to think i was being some sort of smart know-all to question his choice.  pugwash, i wish you all the very best in normandy

 

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[quote user="pugwash"]

L/Gal,  I know what you mean when you say I am going to loooove France, but at least their socialism is up front where you can see it

Dear Captain P, hope you keep your British sense of humour when you move to France[:-))]

, not like the pseudo socialism that we have at the moment, and look like we will continue to have with the Fat jock probably going to get promoted. It will be interesting to see what the Sarkozy effect will be in France. He might even sort out the inheritance problems eventually !.

And your British optimism[:D]. With both of those, France works very well on a number of levels.

 

[/quote]
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[quote user="Iceni"]

[quote user="hastobe"]

But this what happens to people in the UK who die intestate - which is the bulk of people.  My closest friend lost her husband and had to wait for months living hand to mouth while probate was granted etc.  Then under the UK  rules of intestacy she then had to watch while her two teenage sons spent (in the space of less than twelve months) a substantial part of the assets that she and her deceased husband had worked hard to accumulate.  As I recall each son spent roughly the value of a modest detached house - with absolutely nothing to show for it at the end.

Granted, for those that do plan, the french system is worse, but th UK system is far from perfect.

Kathie

[/quote]

Blaming the UK rules for those who choose to die intestate is unfair. If your friend and her late husband had not wanted teenage but presumably adult (sic) children to squander the money they should have taken action to prevent it.

One of the few certainties in life is death. We all know it is going to happen and have adequate time to prepare for it.

The French system is different, but well documented, and is one of many factors to be taken into account before moving. If concerns as to what happens to my money when I shuffle off is important to me then responsibility rests with me to do something about it.

John

not

 

 

[/quote]

Sorry John - it may seem obvious to you. in your 'more senior years' to make a will but it would never occur to most twenty somethings.  And sudden tragic death leaves the survivor with enough to deal with without having to cope without any money for a long period of time while probate is being sought and then dealing with the vagaries of a forced pattern of inheritance. 

In both France and the UK many of the inheritance issues can be avoided with advance planning but similarly both systems give unwanted outcomes without some thought ahead of time.

Kathie

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[quote user="pugwash"]

Kathie,  I do not know anything about your circumstances, but have you really looked at it?, when I was forced out of work last year 6 years early at that time, I was in a panic because I couldn't find another equivalent job, and I knew there was no way I was going to stack shelves at Tesco at the behest of a snotty 22 yr old with 2 gce's, so I really had to look at my circumstances, and I found that with the obvious trimming of expectations I could afford to stop work if we moved to France (actually I would be even better off if we wnt to Bulgaria or Brazil, but you cannot go too far from the grandchildren). Having resigned ourselves to the lower expectations we find we will be reasonably comfortable with enough fallback, and we are now looking forward to settling down in Normandy and seeing out our time in a lovely garden surrounded by fruit and not trees, with regular visits from family, and still able to go back ourselves a couple of times a year.

Give it some thought

[/quote]

Unfortunately we have two boys who will still be in the UK school system for the next four years so even if  we could do the sums we still couldn't make the move without causing major disruption to them.  [:(]

Kathie

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