French house prices falling ?.

[Sprogster]

There is any interesting article in today's Sunday Times property section, under the 'Overseas adviser' section.

In response to a letter asking whether the current slow down in the UK property market has been reflected in France, and if so should they delay purchasing a property in southwest France, there was the following response, from a well known international property adviser.

"The fall in property prices in many areas of the UK has been reflected in a downturn of interest and, in some cases, price falls in the overseas second-homes market.

Further declines in prices are likely this year, including in southwest France, where falls could be steeper as the region has seen some of the largest price increases over the past five years. So you may get more for your money later this year or next year.

Surveys suggest property prices have hit record levelsd in relation to incomes in France. House prices in France have risen by an average 15% over the past year and this had led to the Bank of France talking of a speculative bubble that may burst in the not too distant future."

Further on in the reply the adviser talks of " Vendors are beginning to offer properties at 10%, even 20% less than the original price."

Food for thought perhaps for those currently looking to buy?.

 

[0BRIAN WOODHEADI,m here in franceddMMyyyy0Falseen-USI,m here in franceTrue]

No not really one could always find a way to a 10% discount from the asking price to include the notaire fee,s.average price inflation for the last couple of years as been nearly 30% a blip will not make that much difference especially since the french want retire here in the sunny south and its only the brits who buy in the north

[The Riff-Raff Element]

Hmmm...I don't know. My favourite fixer-upper (nominally four walls, well ventilated, benefiting from views of the sky and hot & cold running rot) is still on the market at the optimistic price of €85,000, not including anything. I find that the French can be extrordinarily patient when it comes to selling property.

[Anton Redman]

This is the first year I have seen prices adjusted downwards in snowpake in agents windows and that includes the year when the exchange rate went from FF11 = 1 pound to FF7 = 1 pound.

[letrangere]

Oh no, so it's official now?  My OH is going to be unbearable for he's been saying this was going to happen, ad nauseum, for the last 18 months.  I got an inkling it might be when I saw the LF poll on the website.  I guess it was inevitable though as presumably the frenzied buying and galloping prices of 2001/2 were fuelled, at least in part, by massive house price increases in Britain and the Netherlands too.  I'm not an economist but even I could see such "growth" was unsustainable.  I'm not in touch with the UK housing market but if it really is as dire as the media projects and property simply isn't selling, this will naturally impact those relying on capital from their UK home to fund their new French one so it's bound to have a knock on effect.  M

[SaligoBay]

I still find it hard to believe that the UK housing market could have such a dramatic effect on French house prices.   What about the Dutch housing market, what's that doing just now?

Current figures for this here southern bit are that there are 32000 people a year moving in.   And you can bet what you want, it's not Brits that are paying 190 euros per sq metre.

[Miki]

I said on another thread about my conversation with an agent immobilier, who said that although they sold many places to les anglais, they were still a small player in the overall picture and that is from someone who is well known for the number of sales his immo does with the Brits. 

There are many people from other countries buying here who make it add it up a little more substantially but at the end of the day, it is not us that will change the price structure but more a European/worldwide adjustment in financial matters, that will cause rises as well as falls.

There has been a busy spell in adjusting to the house prices of other countries around France and my gut feeling, as I said before, was that for the greater part, the French cannot afford these huge hikes in certain regions. One has to remember that some newly popular places (certainly not all) with the biggest rises, were those with the lowest prices, so they again, were adjusting to their surrounding areas.

For locals, well it is making it pretty damned hard for the young (and others !) to buy a home and although the UK has seen this for some while now, I do think the French will simply step away, mostly because they simply do not have the money to buy and also because for the greater part, they still see a home as a home, not an investment, which has fuelled the greed in the UK to own properties (not homes in many cases). We shall see !

What we are seeing around here at the moment is a longer spell before a sale, that can happen before a continuation of a rise or more normally, one would expect a drop but France, only ever having had one house price "crash" before, has no history of how, when and what will happen. The only sure thing, it will react to the happenings in the world around it.

 

[letrangere]

Miki, I know you remember the really grim period for the rural French property market in the mid-90s but can you recall what triggered it?  And was it country-wide?  At the time, I was only conscious of what was happening in the Dordogne where several friends found themselves in negative equity yet couldn't sell their properties even after dropping prices 20/25%.  The market was dead and remained so for a couple of years.  Most startling of all, some estate agents actually began telephoning clients who had previously made telephone or fax enquiries in an attempt to chivvy renewed interest! 

SB: there was an article in LF mag recently about 3 Dutch women running a B&B in Provence.  They said that they had all sold up in Holland at "the peak" so had plenty of capital to re-invest.  That "peak" they refer to was in 2002.  Doesn't that tie in with what's happening in Britain?

M

[Teejay]

[quote]I still find it hard to believe that the UK housing market could have such a dramatic effect on French house prices. What about the Dutch housing market, what's that doing just now? Current figures...[/quote]

There was, in November 2004, an article in the Sud Ouest about the flaming of house prices in the South West.  It suggested that they were unsure about how long this trend would continue, however it did not state that the rise was due to Brits buying in France.

The most pricey areas were Biarritz, Hossegor, Bassin d'Arcachon, Bayonne and La Rochelle.  After that came Bordeaux, plus suburbs, Landes, and Charente-Maritime. 

Dordogne, Gers and Lot-et-Garonne  were approximately the same.  After that the Charente, which had seen a big increase in prices of recent times.

Speculating on the future of the housing market and what will be the final outcome is chancy at the best of times.  There are too many variables.  Some parts of France will always hold their price, whatever the UK housing market is doing. 

[Audois]

I think this subject is two-pronged.

 

1. In this area the French are getting 'greedier' (as are the English who are selling too!) with ridiculous figures for houses that don't deserve it and in some cases more expensive per sqm than some areas of London!  These prices deserve to have X% knocked off them.

 

2.  Yes, the bubble has reached it's height I believe.  But unlike with the previous 'fall' here, I don't believe they will fall all that much in some of the favoured areas (south particularly) due to the Euro.  You can still find other Europeans looking to buy, who have the same currency, not such an inflated market as the UK and with cash to spare.  Additionally to this there seems to be some interest (not massive at the moment) from the former Eastern European countries and Russia.  The former Eastern Europeans will be joining the euro and therefore are investing in their future currency.  Many of these countries are starting to see an influx of Brits and other Europeans buying their property and so the market goes on.

 

So, in conclusion, yes, I feel the market will 'drop' but not massively, probably to the 'real' prices that most property 'should' be marketed at!

 

[Patf]

"The french are getting greedier" - in our small commune two farms were for a sale for over 2 years. In the end both were sold to french families, and I know that one of them paid slightly more than the asking price. Both are doing extensive renovations and rebuilding, so there's no shortage of money for them. Pat.

[Hegs]

I spent a little while looking at the local online immos tonight for my area, (Aude/Ariege border, nr Audois). My impression is that prices in the area are still going up quite noticably, especially for village houses and still selling, a lot of property also marked as sold. There doesn't seem to be very many largish properties with a reasonable amount land up for sale either in 200-250k+ bracket which I'm sure there used to be.

Interestingly nearly all property sales in my area I am aware of have been to French including many locals as well who surprised me when they said they were buying.

Personally I have thought for a long time that prices have to fall - 120k village houses and 25k average salaries are not compatible - but I think regardless of what is happening overall in the property market there will be regional and local economic and long term demographic changes, low cost airlines, etc and it could be said this area has been quite blessed so far in that respect which may delay or minimize the impact.

[andycorkhead1]

George is in

Looks like Tony will get in

I think prices in France will continue to rise as more people

leave in disgust after the election

Andycorkhead

[Teamedup]

I actually cannot think of a worse reason for leaving a country. Politics and politicians and all the stuff they get up to can just as easily stink here too.

[Miki]

Agree TU, it's rather like taking your ball home as no one will play with you. If they think coming here is better, then they really will be coming wearing the proverbials.

Politics in France, now there is reason to go and live in the UK if ever there was one, just ask the hundreds of thousands of French that have already done just that 

Another question, all those that will leave in disgust, what exactly are they doing about ousting Blair ? If there are many that will leave, shoudn't they get together and do some foot slogging and drum up support ? or is it better just to let it happen and move from the UK. Are they so disgusted that they don't vote, if that is the case then one must look at the opposition to see why they wont go out, to vote Blair out.

The UK is a true democracy, it is a very simple procedure to vote, so if Blair wins, well that, as they say, is how the cookie crumbles. What this country doesn't need is a bunch of whingers moving here and moaning on about the UK, we have our own troubles here thanks and we don't want another lot of what the Ozzies detest

 

[Will]

Thank you Miki - couldn't have put it any better. The reason for moving to France should be because you want to, or need to, live here - not because you don't like Britain.