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French house prices forecast to fall


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Having spent a lot of time looking for a suitable property I have seen a lot of properties I would consider to be seriously overpriced. Of course there is a big difference between the asking price and the price at which the property is finally sold for. I have noticed substantial reductions in the asking prices presumably because there has not been any interest at the original price. I sometimes get the impression that there are two prices being asked 1) if it is a UK citizen who is buying and 2) a lower more realistic pric if it is someone else.

So far we have noticed a shortage of new properties coming onto the market recently which is making the search a bit frustrating.

But hey this will make the righ property even more attractive when we find it.

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I sometimes get the impression that there are two prices being asked 1)

if it is a UK citizen who is buying and 2) a lower more realistic pric

if it is someone else.

Spot on Rabbie. The phenomenon known as le prix des Anglais is well known especially since the TV programmes and Ryanair started around 2000....

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There is a lot of nonsense talked about this. "Special prices for foreigners" - what tosh! This is impossible under French law. An individual or an agent selling property in France must clearly indicate the asking price on his adverts, web pages etc (unless he doesn't really want to sell) ... and that's the price for everyone. If someone (a Brit, a Thai or a Parisian) is willing to pay the asking price then he gets the property. The owner can be compelled to sell it to this person. If he refuses (for whatever reason) then it is a 'refus de vente' and the courts will ORDER him to sell the property to the person offering to pay the asking price.

The confusion lies in the cases where the seller does not really want to sell - and has indicated no asking price -  and a buyer makes an offer. Then one can get the impression that he is favouring one or other of the offers he gets. But these are marginal cases.

In the vast majority of property sales there is only one asking price and the first person to meet this price gets the property. It's no more mysterious than buying a coffee in a French café: the prices MUST be displayed publicly and these are the prices paid by everyone: French, Thai, Australians or Irish.

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There can be huge disparities between the asking prices offered by agents for the same property. Or at least that was the case for some time in the "boom years". The canny agents made their websites, and their client handling, more attractive to UK buyers which often meant prices were paid well above what would have been paid by a local.

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I wish I could pretend to have been terribly clever and blessed with amazing foresight, but it was pure chance that led us to buy a house that needed absolutely nothing doing to it, as it had been "done" to a very high standard by our vendors. OK, we put in a pool, and eventually a second woodburner, although central heating was already installed. Apart from that, we've redecorated and carried out the regular and ongoing routine maintenance which we would have expected.

Although we've no intention of selling up, I'm glad we haven't invested loads of money or, perhaps more importantly, labour and time, in renovating. Should things change and should we need to sell, we won't have the heartache of seeing all the additional investment disappear... If someone wants to rip out the kitchen, I won't worry: it's still the one that was there when we bought the house.

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[quote user="Gitesforsale"]There is a lot of nonsense talked about this. "Special prices for foreigners" - what tosh! This is impossible under French law. An individual or an agent selling property in France must clearly indicate the asking price on his adverts, web pages etc (unless he doesn't really want to sell) ... and that's the price for everyone. If someone (a Brit, a Thai or a Parisian) is willing to pay the asking price then he gets the property. The owner can be compelled to sell it to this person. If he refuses (for whatever reason) then it is a 'refus de vente' and the courts will ORDER him to sell the property to the person offering to pay the asking price.

The confusion lies in the cases where the seller does not really want to sell - and has indicated no asking price -  and a buyer makes an offer. Then one can get the impression that he is favouring one or other of the offers he gets. But these are marginal cases.

In the vast majority of property sales there is only one asking price and the first person to meet this price gets the property. It's no more mysterious than buying a coffee in a French café: the prices MUST be displayed publicly and these are the prices paid by everyone: French, Thai, Australians or Irish.

[/quote]

A first post by a completely independent person.[8-)] I judge simply by your link.

How glad I am that you can teach people like me who have bought an sold 5 houses in the last 20 years

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Two words in your post merit analysis. 'Independent': did I ever claim to be independent? No, I clearly indicated (through my link) that I am an Estate Agent.

The other word is 'teach'. Did I set out to teach you (I don't even know you) anything? No, my aim was to set out the law as I know it and the situation as I have experienced it. That's the whole point of a forum. Other participants are then expected to chip in with their reading of the law and their experiences, n'est-ce pas?

Just making sarcastic comments is not terribly constructive.

As for the 'first post' ... one has to start somewhere!

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We were surprised (pleasantly!) at the recent valuation put on our house by two local agents - and they seem to think that they can get that price which we would be very happy with, plus their fees of €16.000.

I think a lot depends on location as we're in a popular holiday town, which also has lots going on in winter.

We've previously lived in more rural places where everyone stops to watch a car drive by - never again!  

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We all know that many agents target specific markets ie Brits, Dutch etc. These agents tend to market properties at the highest rate within the meterage formula. I am wary of agents. We had one well known who thought we could get at the top end of  the valuation. But also advised that we may need to pay 1600€ extra in advertising for specialist magazines. A big con....not selling any longer  but now making money on the adverts. The cost of the adverts is almost equal to what we would have to pay in the UK for the total agents fee.

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I think we should make the distinction clear between "agent commercial" and "agent immobilier". An agent commercial is someone - without any specific qualification - who registers as such with the Greffe du Tribunal de Commerce and who then works for one or several agents immobiliers. They go around promising the world, chatting up buyers and sellers and even running their own websites. The "agent immobilier" however, is the professional. He/she usually has to create a limited company (SARL), get third party insurance, put up a financial bond and get, above all, a licence to trade. This is the famous 'carte immobilière' which every estate agent must possess. These licences are issued by the local préfecture after a long process of registration where conditions laid down in the founding law (loi Hoguet 1970) - aptitude, qualifications, experience - are checked and evaluated.

It therefore often turns out that the sort of scam described by 'Aly' is the work of either an unscrupulous 'agent commercial' or of a foreign agency using the internet to work the French market. If it is the work of a real, French-registered Agent Immobilier, it is all too simple to complain directly to the préfecture where that agent is registered to obtain satisfaction. He/she may lose their licence ... that's why they don't normally engage in these sort of practices.

These sanctions against real estate agents mean that more and more people are setting up nebulous 'finders agencies' or simply 'property portals' on the internet where, freed of the constraints imposed on real estate agents, they can promise the world and charge what they like.

The moral of the story is: find out who you are planning to deal with. Ask them first off who they are: agent commercial, agent immobilier, property finder of simple publicist?

If an agent commercial then ask to see his/her card associating him/her with an estate agent. (compulsory). Then ask for their rates of commission. If you find them too high then attempt to bargain. (My agency's rates are 4% for a property under €500k and 3% for properties over that). There is no reason today to charge higher than these rates. 

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Coming back to the original thread, I have just been looking through local property advertised in Leboncoin and I do get the distinct impression that prices have comes down quite a way, even in the Vendée which is a growth area for pensioners and companies.

I am referring to the complete range, not just the type of place which Brits seem to prefer, though round me, many seem to have got modern places.

The advent of Mr Hollande and his cronies is likely to exacerbate the fall, IMHO.

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I am no expert. the agent I referred to is a HUGE national agent with offices everywhere.The fees you quoted are abt right. We were asked for 5% plus the advertising costs. Perhaps that is not common. As I said some agents specialise in the overseas market. I am not talking abt your local town agent. Time will tell.how the market is going.. But then who wants large quanities of Euro - not me especially if it becomes the franc again

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People don't have the wherewithall any more to do all those renovation works these days I feel and lets face it, materials and artisan's charges have been going up steadily (I'm glad my OH had plenty of work when he was alive as things are becoming harder and harder) for the past few years to take into account the rising charges of their insurance,cotisations,accountants,carburants at the highest price ever for years and keeping vehicles roadworthy etc before even buying and paying for the materials to do the work with. There are loads of little houses around this area as well as large ones but they are just not selling and I feel they are overpriced and some, like my neighbour who has not had one person interested since she put it for sale 18months ago, need a fair bit spending on them and that is very evident without even entering the building which puts many buyers off when they can buy a newish house for the same price.

There are loads of empty immo shops around this region and when you look at some of those still inbusiness they all have the same properties for sale and they put them on leboncoin too. My neighbour has hers on that site and an immo has put it on as well but for €12,000 more expensive, no need to know which one you would avoid. When OH used to renovate whole properties here from a basic shell to a lovely comfortable home it was obvious the owners would never recoup all their investment into that work, a great percentage of which is invisible anyway and still, many seem to think they can ask for all that investment when they come to sell. Even land sales have gone silly, some here actually twice the cost of the actual construction of a new house to go it. I think my sister feels peeved as in the UK they spent £650,000 buying a house at the top of the price boom and recently had it valued at £400,000 if they wanted a realistic price to sell it at,but there you go, if we could all see what was coming we'd all be blooming millionaires.

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I'd be surprised if we achieve our asking price as it's more than we thought, but hey ho, we aren't the experts and they think it's the right price. We've been on the market now for three weeks, had eight viewers, three of which seemed to be seriously interested and one of whom has made a second visit. We'll just keep cleaning and polishing and see how it goes. 
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[quote user="Gitesforsale"]There is a lot of nonsense talked about this. "Special prices for foreigners" - what tosh! This is impossible under French law. An individual or an agent selling property in France must clearly indicate the asking price on his adverts, web pages etc (unless he doesn't really want to sell) ... and that's the price for everyone. If someone (a Brit, a Thai or a Parisian) is willing to pay the asking price then he gets the property. The owner can be compelled to sell it to this person. If he refuses (for whatever reason) then it is a 'refus de vente' and the courts will ORDER him to sell the property to the person offering to pay the asking price.

The confusion lies in the cases where the seller does not really want to sell - and has indicated no asking price -  and a buyer makes an offer. Then one can get the impression that he is favouring one or other of the offers he gets. But these are marginal cases.

In the vast majority of property sales there is only one asking price and the first person to meet this price gets the property. It's no more mysterious than buying a coffee in a French café: the prices MUST be displayed publicly and these are the prices paid by everyone: French, Thai, Australians or Irish.
[/quote]I accept your expertise on this subject. But it seems to me that the type of property which seems to appeal to British buyers and is less attractive to French buyers is often significantly overpriced. Research on some of the property websites aimed at english speakers shows significant price reductions after they have failed to sell at the original asking price.
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[quote user="Renaud"]No need to worry about Hollande's raise in capital Gains tax for expat French home owners then.[/quote]It's not for expat French home owners it's for non-resident in France second home (in France) owners of any nationality - to make them pay the same level of taxes on rental income and capital gains as French residents (social charges previously paid only by French residents are now classed as a tax and so can be made payable by non French residents too) . 

Will that make the prices go up rather than down as people try to cover the extra expenses?  Or make people let their homes instead of selling up?  Maybe rents will then go down - they do seem expensive in relation to selling prices.....

Anyway, I can't see people suddenly selling their houses at a discount to get rid, to avoid paying taxes on the profit (any portion of the profit is still a profit!), so it shouldn't make the prices go down.

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I was thinking of the Capital Gain Tax on for a non-French resident selling their house, raising from under 20% to above 30%.

My thought is making the purchase of a house in France less attractive to a non-French resident may well lower the prices of those houses, so doing much to cancel the likely amount raised by the tax increase.
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No Renaud, it's not the CGT that has gone up although the ignorant British Press have given that impression.

It is ( as Debra explained) that non-resident second home owners will now have to pay a second charge on top, known as the CSG, just about to rise to 15.5%. That second charge has always been paid by resident owners, so on the whole is not something new in the French market.

The Capital Gains element continues to be calculated on such factors as how long (on a base of 30 years) the property has been owned as well as the added value. It could even be zero in certain cases, but if usually variable, starting from 19% then diminishing.

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edited because I just saw that Norman already explained by the time I lost my connection, got it back and hit submit!  However I still say:

I can see you might factor in the taxes on rental income if you were

intending to rent it for periods you weren't using it personally but do

people really consider taxes on future capital gains when they buy a

holiday home?   Even if they do, are foreign buyers really going to have

that much impact on the whole market?

re the term for capital gains freedom - I thought I'd read that Hollande had decided to reduce it back to 20 years.... (used to be 22, then 15, then recently 30 but now he's changing it again).

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For those on lower incomes who are reliant on letting their holiday home for a few months a year to help fund the cost, clearly any increase in tax is not going to help.

The negative publicity these tax changes have generated in the UK, is bound to make individuals considering purchasing in France a bit nervous about further increases.

Also alternative countries like Spain and Italy who will now have lower taxes on property than France might be favoured instead.
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