Why are house prices falling in Dordogneshire?

[mint]

Still looking at houses to buy and cannot work out why prices are falling fastest in Dordogneshire?

Had some friends over from the UK today and they have said the same to me.

Anyone got any theories or inside info?

I'm not sure I want to live in the Dordogne but, if a real bargain comes up, what the hell, I'm not going to turn up my nose!

[Nearly Retired (I am now)]

This is a pure guess, but I'm sure it's not far off the mark.

If that's truly the case, that prices are falling faster there than anywhere else in France, then I reckon the  ".....shire" bit explains it all.

The Dordogne house prices are probably firmly linked to the ability to pay and find funds of any potential buyers who, might just happpen to be British and make up about 95% or so of buyers.

[Mr Coeur de Lion]

It was probably one of the highest climbers in terms of property price. The old saying, the bigger they come, the harder they fall could apply.

[AnOther]

Falling incomes from pensions and Gites aside, a fair number of properties on the market as forced sales due to health care issues perhaps ?

With the scarcity of Brit buyers the market for your average 'twee' Brit DIY renovated stone house has all but evaporated, the French certainly don't seem to have much of an appetite for them.

[Ron Avery]

[quote user="sweet 17"]

Still looking at houses to buy and cannot work out why prices are falling fastest in Dordogneshire?..........

................  Anyone got any theories or inside info?

[/quote]

 

Its an area with a very high immigrant population and you know what that does to house prices[:D][;-)][Www]

[mint]

Bloody hell, Ron, not them immigrants again?  Wish they'd go somewhere else but then, on second thoughts, I'm an immigrant aussi, moi!

[Sprogster]

House prices generally are falling everywhere, as most purchasers need a mortgage and the banks do not have enough money to lend due to the credit crunch. 

Also in Dordgneshire there is a high percentage of second homes and in an economic downturn these are usual the first things to go, when people have to cut back on their expenditure. 

[Tony F Dordogne]

One of my chumlettes works for a small chain of Dordogne estate agents - and she tells me that the market is flat, it's a real buyers market atm.

The main reason seems to be the £ -v- euro, properties are over-expensive here but the exchange rate is really difficult.  Plus there's the saturated gite market, the health care issue and the fact that many sellers here see brits as an easy/soft touch.  Opposite me there is a hovel for sale with no facilities other than electricity, plenty of land but it's a protected wood and can't be changed, there is literally no garden, out the house 40 foot drop all round and it's on the market for 170,000 euros, second time in three years and I've been asked to look out for a Brit buyer for it - I made my views plain.

But another chumlette's house nearby went on the market about a month ago and it was sold, subject to final contract, to a Dutch couple, within 10 days.

Bottom line sweet is that houses here have been over-inflated for ages - and not just because of the Brits, the Dutch, Americans and Australians seem to buy here and the French took their money where and when they could.

I think this is called a 'market adjustment', otherwise cold shower, reality check time for many trying to sell here.

[Anton Redman]

When we were looking four years ago there was very little property on the market. On a couple of recent visits we were amazed at the number of AV signs and boards.

[woody234]

i expect the brits brought the french houses with a loan from the equity of their uk property and now they are selling there french property to pay off the rest of there uk mortgages or vicer virser

[Suze01]

Bit of a sweeping generalisation there Woody.

[giantpanda]

Hi!

Because of the new Health regulations, the number of Expats coming to live in France has probably drastically gone down. Mainly because many come on so-called pre- pension.

Further the selling of British houses is getting more difficult.

And of course, generally in France for the French, there is a a sales drop because:

- of general business climate

- increase of bank lending rates

- increased difficulties to get mortgages.

Yours,

giantpanda

[magic7532]

Brits interest in the area had definitely inflated prices at a much faster pace than other regions in France so I guess the landing has to be a bit rougher than elsewhere now.

[BJSLIV]

Prices are falling rapidly in the rest of the Home Counties, why would Dordogneshire be exempt?

[woody234]

dordogne has the most brits with holiday homes so now the global economy is on the down cycle and property is droping 1k a month the brits are selling there holiday homes that they brought for 100k and selling for 200k  for example but economists say property is a third over valued so buyers are thinking 200k house is worth 132k but the banks are not lending money to people to buy a house at the moment

[AnOther]

Lots of reasons as already mentioned but also some realism infiltrating the market perhaps ?

Too many people I think still have the UK mindset when it comes to French property but are beginning to comprehend that the bubble has well and truly burst and if they need to sell then they have to price accordingly.

The message doesn't seem to have reached everyone though:

I was talking to an estate agent a couple of weeks a go who told me that for the first time he has declined to take on a property from a Brit because the owners personal idea of it's value was so ludicrously high that it stood no chance of selling. Property bought for 200k, probably same again spent renovating and now expecting to get 600k when the true market value is no more than 400-450k

[mint]

[quote user="BJSLIV"]Prices are falling rapidly in the rest of the Home Counties, why would Dordogneshire be exempt?[/quote]

Very good point and it made me smile.  I know that perhaps it's naughty to smile because it's a serious matter for those concerned.

[Scooby]

I think its depends on the property - we have friends who bought their house the same time as us (two years ago) and are in the process of seling it for significantly more.  Ok they have renovated but nevertheless the increase in price in substantial.  As an aside, we bought our house with a french mortgage - fixed at 3.8% for the term of 15 years (and we were also lucky enough to transfer our deposit and pay for (French) renovation work when the exchange rate was 1.5 euros to the £1) so if we had to downsize anything it would be our UK house not our french home.  Fortunately we both have very good, secure jobs so don't envisage a downsize until we choose to.

As an aside we are not really interested in the selling price of our homes as we are not planning to sell.  Our UK house increased in 'value' by over £0.25m over the last few years but it's just a paper increase and means nothing until we want to sell..and downsize.  Likewise any fall is, again, a paper fall. As we have no intention to sell either home their current 'market value' is irrelevant.

[Callie]

"ErnieY" Lots of reasons as already mentioned but also some realism infiltrating the market perhaps ? Too many people I think still have the UK mindset when it comes to French property...............I was talking to an estate agent a couple of weeks a go who told me that for the first time he has declined to take on a property from a Brit because the owners personal idea of it's value was so ludicrously high that it stood no chance of selling. Property bought for 200k, probably same again spent renovating and now expecting to get 600k when the true market value is no more than 400-450k"

I think you've got it in one, Ernie. Many Brits thought they could come to France, buy a cheap property, do it up and sell it for a huge profit. As you say, the British mindset.

But nobody who bought, say, 2 or 3 years ago, could have foreseen the economic slump we are going through now. As a result of this, there are a huge number of 'done up' properties on the market but only a limited number of British buyers with that sort of cash to spend.

I suspect a lot of people have spent a great deal of money doing up properties without really thinking about their resale value. Now it seems that they will be lucky if they can recoup their expenditure - let alone try to make another 2K on top (as in you story of the estate agent). Funnily enough, it has already happened in this area (Maine et Loire) - estate agents have bluntly told British vendors that their asking price was far to high for the current market. The Brits still tend to ignore the fact that they are the minority buyers (except, perhaps, in the Dordogne) and that in the end a property is only worth what someone will pay for it.

[mint]

[quote user="Scooby"]I think its depends on the property - we have friends who bought their house the same time as us (two years ago) and are in the process of seling it for significantly more.  Ok they have renovated but nevertheless the increase in price in substantial.  As an aside, we bought our house with a french mortgage - fixed at 3.8% for the term of 15 years (and we were also lucky enough to transfer our deposit and pay for (French) renovation work when the exchange rate was 1.5 euros to the £1) so if we had to downsize anything it would be our UK house not our french home.  Fortunately we both have very good, secure jobs so don't envisage a downsize until we choose to.

As an aside we are not really interested in the selling price of our homes as we are not planning to sell.  Our UK house increased in 'value' by over £0.25m over the last few years but it's just a paper increase and means nothing until we want to sell..and downsize.  Likewise any fall is, again, a paper fall. As we have no intention to sell either home their current 'market value' is irrelevant.
[/quote]

Your friends might be in the process of selling for "significantly more" but when will someone actually buy it and, when they do, for how much more?

In my books, "in the process of selling" is one thing and "having sold" quite another.

Perhaps you'll come back and tell us the results when the property has been sold in fact and the dosh is in your friends' bank account?

Not meaning to be rude or controversial, just thinking aloud.....please don't take this personally as it's not meant that way.

[Scooby]

When I said in the process of selling I meant that they have accepted an offer but not signed contracts yet.

[mint]

Well then, they are to be congratulated![:)]

[Scooby]

In defence of the comment about our friends house -  it is lovely and they have done a beautiful job renovating which I'm sure has helped in getting a sale.  With regard to the wider market in our area I have no idea - not being in the market (to buy or sell) we haven't really paid much attention.  However, the ramifications of the credit crunch have spread worldwide so its not surprising that the French property market is as badly affected as markets elsewhere.

[mint]

No, no, Scooby, there is no need to defend your comment about your friends' house.

There is a lot of luck and a little bit of good judgment when you make money on a house in a short space of time.

In the past, I have made money in the space of months and, likewise, have also lost money.

But, you know, you always meet or hear of someone whose story bucks the trend!

I am not negative about good luck stories, just happy for whoever it happens to!

[BJSLIV]

so its not surprising that the French property market is as badly affected as markets elsewhere.

The general opinion is that it would be surprising if the French market were to be as badly affected as places such as Spain or the UK. Because of the strict rules applied to French lending there was far less upwards pressure on prices than elsewhere. The properties that are more likely to suffer are ones that are part of the UK property market, but just happen to be located in France. Particularly at risk  are the ones that have been over-improved relative to prevailing French  price levels and taste.