French house prices fall

[Will]

As you say, there is no right or wrong, just different ways of doing things and looking at things.

Most people using this forum might be mature and wary, but the majority of British housebuyers in France - at least up to a short while back - are far from those things. Being closely linked with what is probably one of the more honest and straightforward estate agencies in our region, I have heard plenty of stories and it is frightening how gullible and ill-informed many people are. They would believe almost anything you tell them, and it is easy to see how the rogue element in the agency (and notarial) profession has prospered.

I think in Britain it is more a case of mortgage lenders insisting on a valuation survey, which will include the most basic structural elements, rather than buyers choosing to carry out the survey. Of course, if a surveyor is visiting the house anyway, then they might as well do a more comprehensive report... Anyway, things are not necessarily black and white. Many buyers do not realise that often a surveyor will work for the same company that owns the estate agency (and we are not talking about the small Arthur Daley agencies here, quite the opposite) so are rather less independent than they seem, particularly where valuations are concerned.

In France, the important thing to the lender is that the borrower will be able to pay back the loan, rather than will the house fall down and not be re-saleable. The French attitude is more that if it is a new house it is guaranteed, if older then it hasn't fallen down yet.  And in either case the insurance will sort it out (insurance seems to work slightly differently, and is regarded differently, in either country). Among the British, more will buy in France without mortgage finance than would in Britain. So as the survey is less compulsory, fewer will bother. Although structural surveyors exist in France, the more usual practice among the French is to get a builder or architect to give the place a once-over. A certain amount of logic there, though it does raise another question. The British will say that if problems arise they can sue the surveyor, which of course you cannot do if you did not use a qualified and registered professional. Although the French are strongly into professional liability, there just isn't the same 'compensation culture' as in Britain and, even more, the USA. 

[Anglo-Frenchman]

To answer the question simply, the UK is not the only country in the world where surveys are the norm and there are qualified surveyors the world over to the prove the point.  We receive instructions from members of pretty much all the EU countries, the US, Australia, New Zealand, South Africa and the Far East so it is not a request that is peculiar to the British by any means.  Equally as the French are realising the potential for investment in property they are starting to seek independent advice about property also. 

[mickcooke]

Hi Jupiter and others - have you had any luck finding out  information on how property prices are moving in France yet? If so please could you pass on details, web address whatever because i will be needing this information soon as well. (Anything like Halifax, Nationwide monthly updates for instance? Is there any info on regional differences? I get the impression that the difference in regional movement  is as great as the difference in actual regional prices - ie prices could go down in one region while they are going up in another.

[Jupiter]

Mickcooke

I regret I cannot offer any new information about market trends. All I am really doing right now is casually browsing the market for another house, having just sold one. We don't live in France for more than 4 months each summer so we can go slow on this. For the  purpose of our current search for a house my approach to property prices is very low tech (probably like everybody else's). At base I know recent actual selling prices of 5 houses in our vicinity, these provide solid benchmarks. I'm also aware of another 5 or 6 houses that have been sitting around unsold for over a year - these show me specific prices higher than the market will bear. Against this simple sort of matrix I am trying to compare new offers. Of course I would like to factor in market trends but I am merly guessing that the market is flat or very slightly into negative territory.

[Lassie]

To check house prices, look up the website of Particulier a particulier which is the biggest weekly magazine advertising properties by individuals throughout France.  They keep records.  Also the Association of Notaires in Paris I know publish quarterly prices of everything sold in Paris by arrondissements.  Maybe other associations of Notaires in the Regions do the same.

 

If you watched the News tonight on TF1 you will have heard how Paris overall went up 8% and Nancy 14% last year.  My feeling is that houses which appeal to French buyers are still selling well.  Houses that the French did not want and were bought by Brits, done up by DIY enthusiasts and decorated and furnished Brit style may be a bit stuck on the market just now.

 

Dont forget the effect of next year's Presidential elections.  My French neighbour is desperate to sell quickly fearing Segouline wins and confidence will drop for property as well as other assets. Two people I know who invest in property are now buying not in France any more but in Switzerland.  Its not the best time to be thinking of putting money into France until after next May's elections but I dont charge for that advice so dont be put off!

 

Good luck whatever you decide.

 

[Kitty]

Lassie has a point.  I have two French friends wanting to sell their surplus property ahead of the elections.

[Cassis]

Thank goodness I'm not a property speculator.  Must be very trying times for them.

[Albert the InfoGipsy]

Cathy wrote

I'm fascinated by all the concern that the French seem to be displaying about the elections. In most countries the general view of elections s that the population chooses someone who'll do a good job of running the country.

Are the French just more realistic than most?

[Quillan]

Actually I don't think its anything to do with the elections at all, its all a smoke screen. There are people who bought up houses 10 to 15 years ago (or even longer) and paid silly money for them. Now they find these houses are worth 200 to 300k each and they are going to be hit with the new wealth tax. They are just off loading them before anyone realises what they are doing and before the laws are actually implemented at a local level. Theres a few down here who have gradually bought properties and have 10 or more that they rent out which are now up for sale because of exactly that reason.

[Miki]

[quote user="Quillan"]Actually I don't think its anything to do with

the elections at all, its all a smoke screen. There are people who

bought up houses 10 to 15 years ago (or even longer) and paid

silly money for them. Now they find these houses are worth 200 to

300k each and they are going to be hit with the new wealth tax. They

are just off loading them before anyone realises what they are doing

and before the laws are actually implemented at a local level. Theres a

few down here who have gradually bought properties and have 10 or more

that they rent out which are now up for sale because of exactly that

reason.[/quote]

I am never sure that elections do too much in the early days, in

Labours case in the UK, once the interest rate was handed over to the

Bank of England, sure what with the then "good feel factor around"

house prices rose but there are many instances of when, why and how

much, prices rise, even in mid term or even end term !! But what I

would like to know is, even if the French sell their places to avoid

this wealth tax, where are they going to hide the large amounts of

money ? It was one thing stuffing a few thousand Francs under the bed

and bringing it out slowly to change to Euros but quite another thing

now that the tax evasion laws have been tightened up..........

All sales are notified to the Impôts, so for sure it will be noticed................

[Alexis]

Don't talk to us about tax!  Well, not us, MIL.  Since the death of FIL in July you wouldn't believe the amount she has had to fork out.  The trouble is, the properties are still in the family, waiting for OH and his two sisters to inherit and wham bamm, pay more tax!

Funniest thing was that when she contacted the department for her pension, she discovered that he hadn't declared her for forty years....Well, I sniggered.  Just over 100€ a month she gets.  Not that she needs the money, of course.  My FIL was so organised I can't believe he would leave chaos behind him like he did.  Thank goodness for the family accountant.

I'm glad to be leaving it all behind us.

[Ciel Bleu]

Going back to an earlier question regarding published details/websites about trends in property prices, I've found this website which has price changes in 500 French towns between april 2005 and march 2006 - all totally bona fide figures from Notaires de France.

http://www.lexpress.fr/services/immobilier/dossier/immobilier/dossier.asp

Just click anywhere on the map and the figures scroll down.

Looking at the percentage change in the price of old houses over that period, there are hardly any negative changes so far (although there are some eg Nimes has dropped by 7.8%), BUT as the figures are only looking at the towns it doesn't give much indication of what's happening in deeply rural areas. Quite interesting to look at though and some of the price increases are astronomical.

What does anyone else think?

[Deimos]

I wonder if there is occasionally some negativity from Brits in France about Brits moving to France (one can occasionally see it in posts on this forum). Might be that sometimes this comes out as how the French property market is doing really badly and dropping, houses cannot be sold, and your investment in your French property was a real mistake ...

I've purchased one house in France where I now live so really cannot comment on the increases or decreases or property prices nor how long properties take to sell. People seem to suggest it is not uncommon for French properties to take some time to be sold. An estate agent did call round a month or so ago as she had somebody specifically searching for a property like mine. She knew the previous owners (and thus the property) and when I asked the sort of price it was much higher than I paid. However, she was trying to persuade me to sell so I have no idea if I would have achieved anything close to what she said (I can be cynical when it comes to Estate Agents).

It is certainly interesting information and does not seem to indicate all is doom and gloom !! I have also read that last/year before last was the first when there was a net movement of people from cities to countryside (previously always been a net movement countryside into cities). Unfortunately cannot remember where I got this info - may have been on a forum but I cannot vouch for its accuracy. However, if it is true it might suggest similar (or greater) effects are occurring in the countryside.

Ian

[Will]

This all started as a scare story from the media, based apparently on a very small sample of British agents in France.

What is fact, is that a few years ago a lot of British (and other foreign nationalities) bought in France because of many reasons, one being of course the television programmes saying how wonderful it all was. Now, although many of these people are perfectly happy with their new life, for even more reasons - e.g. difficulties of finding work, high social charges, loneliness, family reasons have all been cited - equally as many are wanting to sell up. So there is a glut of British-restored and part-restored property on the market. Far more houses than there are buyers, of course, because many potential buyers from overseas are not interested in these, they still want an unconverted project of their own.

Therefore if these people want to sell, they have to sell at the price the market governs. Which appears to be more than they paid for the house, and maybe covers the cost of DIY renovation, but does nowhere near cover the cost of a full professional job at proper French market rates. So this is perceived as making a loss on the deal, i.e. a fall in prices.

Although the French do not publish the sort of figures that are available in other countries giving actual selling prices for individual houses, and which make valuation much easier, then bodies like the notaires, and the FNAIM agents' association, do publish trends for house prices, broken down by area and/or type of property. As most of these show an upward trend, albeit slow, then the story for France as a whole is rather different from the specific British-buying-in-France market.

The latter is governed to some extent by what is happening in the British housing market. Although that went through a sticky patch, in may areas it has turned round completely and we are back to there being a shortage of properties for sale, which is bound to prompt price rises, even though the Bank of England may try to slow these by raising interest rates. So it is not unreasonable to expect that with UK prices rising again, some people will attempt to release equity by moving overseas, or raise money on their newly more valuable main residence to buy a holiday home. And this will no doubt have a positive effect on the small part of the French market that depends on British buyers.

Without doubt, shortage of work in rural areas has caused a move from the country to the cities. This has had the effect of raising town prices with respect to country homes. So there has been a reverse, with some city dwellers moving out in order to get more house for their money, despite having to commute. I doubt if France will ever become a commuter country like England - the population density will not merit it and the public transport system is unlikely to support it - but there seems to be a distinct trend.

[julia]

[quote user="Alexis"]

Funniest thing was that when she contacted the department for her pension, she discovered that he hadn't declared her for forty years....Well, I sniggered.  Just over 100€ a month she gets.  Not that she needs the money, of course.  My FIL was so organised I can't believe he would leave chaos behind him like he did.  Thank goodness for the family accountant.

 

[/quote]

That same situation happened to a neighbour of ours, He died  and when all his affaires were sorted out, she wasn't in the system either!

Do women really sit back and let their other halves do all the paperwork,  No one would be able to decipher it if my hubby put his scrawl to it! It sure as heck doesn't happen in this house, my children walk out of the room when they hear me clicking open ring binders.........they know there will be no room for them with paperwork all over the floor and other half retreats to the garage ,coming back only to check the figures add up.

[Ciel Bleu]

My OH genuinely enjoys doing our paperwork, so I let him get on with it (......but of course check it afterwards!!)

Further to my link to property prices published by the Notaires, I've just read on several different websites that although prices are still increasing, the rate of increase this year has slowed a lot, and some economists (on the BIPE website) predict an average increase of 6% in prices over 2006 but average falls of 4% for 2007. It also looks as if the ECB will raise interest rates this Thursday, and most likely again in December as well.

We know of a French family who are trying to sell 2 appartments in the seaside town of Granville in Manche - popular now with the Parisiens I understand. They've had them on the market since last summer but have hardly had any interest at all. I've also read that Les Parisiens have also bought far fewer holiday homes in Calvados this year, so the Brits aren't the only ones 'tightening their purse strings'.

Good luck to all buyers and sellers!

[Monika]

A French house price fall must be such good news for the young to be able to get on the property ladder. If it only would happen in England. Here the young have virtually no longer any chance at all.  

[The Riff-Raff Element]

[quote user="Lassie"]

Two people I know who invest in property are now buying not in France any more but in Switzerland. 

[/quote]

Which, given the way the Swiss tax property ownership, stirkes me as

surprising. Or have the regulations on this changed? Certainly one used

to be taxed on the basis of rent that one was not otherwise paying,

though I think it could be offset against mortagage payments.

[Wibblywobbly]

Well that was all a long read.

Two things strike me, one is that structural surveys are pretty much a waste of time on a renovation project. If you are going to strip a property back to bare walls and put a new roof on, there isn't a lot to survey! The other is property prices are as prone to fluctuation in France as anywhere else. The speculators will take risks elsewhere, and may get their fingers burned, whilst those buying in France appear to have a pretty sound investment.

I was relieved to see that property may stay on the market for over 12 months before selling. Mine has been on for 8 months and I am still awaiting a sale! I would happily drop the price but the English estate agent in France keeps advising me not to as it is in the right ballpark.

I am not out to make a fast buck, it is simply a case of a change in personal circumstances, and I am no longer able to get over there. If anyone has any idea of reasonable prices and wants to drop me an email, type HITENTER into Google and click on Welcome To The Web. I would welcome some advice!

Cheers

Rob G

 

 

[BQF]

Whereabouts in the Suisse Normande??  Its lovely isnt it...