Its now or never

[woolybananasbrother]

Prices of new property in France have fallen through the floor and developers etc are doing everything they can to offer attractive deals. I wonder if these places might make attractive letting or investment properties?

But for anyone buying new, there are great bargains to be had it seems.

http://www.liberation.fr/actualite/societe/333223.FR.php

[Gastines]

We returned to Bournemouth, UK south coast, at the weekend and in one of the property papers there were pages of "Price Reduced" ads. Many being reduced in the £15K -£30K region. I wonder how Mr Darling will make up the shortfall on his income from Stamp-duty and VAT on Estate Agent and Solicitor fees?

[PaulT]

[quote user="Gastines"]We returned to Bournemouth, UK south coast, at the weekend and in one of the property papers there were pages of "Price Reduced" ads. Many being reduced in the £15K -£30K region. I wonder how Mr Darling will make up the shortfall on his income from Stamp-duty and VAT on Estate Agent and Solicitor fees?[/quote]

Mr Darling has more than made up for it from the every increasing taxes from fuel

[P-D de Rouffignac]

I absolutely disagree with wbb's suggestion that now is the time to buy French property, especially for letting or 'investment'.

As always the picture is infinitely more complicated than can be expressed here or even in Le Figaro, but the glut of unsold new-build properties refers mainly to apartments built and financed by 'investors' taking advantage of French government tax saving schemes such as Borloo and Robien, which offered certain guarantees to tenants and controlled rents.

Unfortunately as with so many seemingly attractive ideas to help solve the housing crisis, this one got turned on its head as property developers built and sold (at inflated prices) properties that were badly built and in the wrong place - for example, 30 kms outside town where land was cheap but the cost of transport to work prohibited low-income renters from becoming tenants. As a result many such properties now stand un-tenanted and unsaleable, the owner/'investors' are desperately trying to offload them onto the original developers for less than they paid for them. This may may make them cheap but still not a good investment.

For comparison, exactly the same situation is occurring in a broad band of countryside within 50 miles of Dublin (Ireland) where travel-to-work costs and commuter congestion (there is virtually no public transport infrastrucuture) have forced many workers to stay or return to the centre of Dublin, even at higher property costs but less than the cost and hassle of the twice daily commute from and back to the countryside. The situation is compounded by the fact that the Irish banks (in contrast to the more cautious French) recklessly lent money to buyer/investors, usually against a charge on their first home. Many are now in serious financial difficulty as a result.

The stock of unsold new-builds in France (pop. 61 million) is estimated at a modest 100,000 but in Ireland the figure is much higher for a tiny population of just under 4 million.

P-D de Rouffignac www.francemediterraneanproperty.com

 

[woolybananasbrother]

To be fair, I did use a question mark as to the investment potential of these places. And the article in Figaro also points out that commuting distance is a major factor in saleability.

[AnOther]

I think we can rest assured Darling Darling and Gordon Moron will find a way likely dressing it up as a tax REDUCTION to boot [6]

Remember;  "The art of taxation is so plucking the goose as to get the most feathers with the least hissing" 

Jean-Baptiste Colbert - 1619-1683

Politicians and governments of every complextion have learnt this well [:'(]

 

[woolybananasbrother]

[quote user="P-D de Rouffignac"]

I absolutely disagree with wbb's suggestion that now is the time to buy French property, especially for letting or 'investment'.

As always the picture is infinitely more complicated than can be expressed here or even in Le Figaro, but the glut of unsold new-build properties refers mainly to apartments built and financed by 'investors' taking advantage of French government tax saving schemes such as Borloo and Robien, which offered certain guarantees to tenants and controlled rents.

Unfortunately as with so many seemingly attractive ideas to help solve the housing crisis, this one got turned on its head as property developers built and sold (at inflated prices) properties that were badly built and in the wrong place - for example, 30 kms outside town where land was cheap but the cost of transport to work prohibited low-income renters from becoming tenants. As a result many such properties now stand un-tenanted and unsaleable, the owner/'investors' are desperately trying to offload them onto the original developers for less than they paid for them. This may may make them cheap but still not a good investment.

For comparison, exactly the same situation is occurring in a broad band of countryside within 50 miles of Dublin (Ireland) where travel-to-work costs and commuter congestion (there is virtually no public transport infrastrucuture) have forced many workers to stay or return to the centre of Dublin, even at higher property costs but less than the cost and hassle of the twice daily commute from and back to the countryside. The situation is compounded by the fact that the Irish banks (in contrast to the more cautious French) recklessly lent money to buyer/investors, usually against a charge on their first home. Many are now in serious financial difficulty as a result.

The stock of unsold new-builds in France (pop. 61 million) is estimated at a modest 100,000 but in Ireland the figure is much higher for a tiny population of just under 4 million.

P-D de Rouffignac www.francemediterraneanproperty.com

 

[/quote]

I wonder pdr whether you are right in the light of this evidence?

http://www.lemonde.fr/economie/article/2008/06/19/le-secteur-immobilier-francais-a-son-tour-touche-par-la-crise_1060563_3234.html

[Kitty]

WBB: Can you paraphrase the Le Monde article for those of us whose French isn't on a par with yours?

 

[AnOther]

Ditto, wot she said [:$]

 

[gosub]

[quote user="Cathy"]

WBB: Can you paraphrase the Le Monde article for those of us whose French isn't on a par with yours?

 

[/quote]

If you open the link then right click the mouse somewhere on the page. Then choose "Page info" and then "Translate page into English" Google will give you a reasonable gist of the text

[Clair]

[quote user="Cathy"]WBB: Can you paraphrase the Le Monde article for those of us whose French isn't on a par with yours? [/quote]

Why not use Google to translate the article for you?

Enter the url of the page in the lower box, select your languages et voilà!

It'll never been 100% accurate, but you'll get the gist of it...

The French property sector in turn affected by the crisis

[woolybananasbrother]

I am so sorry, it never crossed my mind. Forgive me.

[Gastines]

I note that Government backed Northern Rock have just issued a Reposession Order on a woman +3 children with a Mortgage of £360.000, as she has fallen behind with payments. The family earnings, £100 a week ? They wonder why they make losses? Just interested in the commission I suppose. The question then arises who re-houses the family and pays ?

I must stop reading the UK papers.

Regards.

[P-D de Rouffignac]

I can find no evidence in the Le Monde article other than confirmation that the French property market is in serious decline, due to the well known factors of higher living costs, tighter lending policies by the banks and general concerns about economic uncertainty. The only crumb of comfort is the report that certain sellers/promoters are offering incentives to buyers, but it is they who pay for these one way or another. There are similar promotions in the car sales sector - eg guaranteed buyback of your current wreck.

All I can say is I am in regular touch with colleagues on the ground (in my area) and some well-established agencies have sold only two or three properties since the start of the year. At the AGM last week of the regional chapter of FNAIM, the president noted that the number of agents in the region has risen from around 300 in 2004 to nearly 500 today - too many firms chasing too few customers.

It is also the case that lopping 10 even 20 per cent off the asking price of a property won't necessarily do the trick, when I have seen property prices triple in the time I have been here (since 2002), albeit from a very low base (25 000 euros for a seafront one-bed holiday apartment.......Ah, those were the days).

P-D de Rouffignac www.francemediterraneanproperty.com

 

[woolybananasbrother]

Yes, you find me a sefront apartment at that price and my little feet wont touch the ground.

[Val_2]

[quote user="Gastines"]

I note that Government backed Northern Rock have just issued a Reposession Order on a woman +3 children with a Mortgage of £360.000, as she has fallen behind with payments. The family earnings, £100 a week ? They wonder why they make losses? Just interested in the commission I suppose. The question then arises who re-houses the family and pays ?

I must stop reading the UK papers.

Regards.

[/quote]

 

How in the name of all that is holy did she get that mortgage inthe first place? We got our first and only mortgage in 1981 and were only allowed 2.5 times our joint earnings which were pretty low as I was an office worker and OH self employed and had to provide five years of audited accounts first before they would lend us anything. Even then we had to put up £1500 deposit on a house for sale back then at £24k. I feel too many people have conned the banks into large loans and the banks are as bad allowing them to have the money and now it is payback time. My brother worked for a housing association on the maintenance side for a few months between jobs in 2002 and they were buying up every property they could lay their hands on ready for a future crisis on reposessions.

[AnOther]

We clearly only have half the story, the bit the paper wants us to see. Even in the height of the lunacy nobody would loan that sort of money to someone on £100/wk

There is a possible clue in 'woman +3 children' i.e. husband scarpered and left her holding the can perhaps, it happens.

 

[Gastines]

It does make one wonder just who's advice to take. About 23years ago,just before we met and married, my wife took out an endowment to cover a mortgage of the grand sum of £8,500. We paid the loan off years ago but thought we'd keep the endowment as a future sum in our old age. It matures in 2 years time,the latest advice from the company is as the TOTAL on maturity is likely to be £3.600, would we like to take out another policy to cover the shortfall? We don't think we will take up the offer.

Regards.

[AnOther]

A aspect of the mortgage crisis not often mentioned is that many have taken out theirs on an interest only basis but without putting a repayment vehicle in place.

In my days of mortgages, now blissfully behind me, it was obligatory and whilst initially I had endowments once it became fairly obvious that they were going to significantly underperform and I sold them off in the TEP market paying the proceeds off the mortgage and changing to repayment at the same time.

A lot of people on interest only are sitting on a timebomb, particularly those who expect their property to fund their retirement [blink]

 

[cooperlola]

The interest only mortgage is scary in the  extreme.  I have friends here who had one of these and when he had to retire early due to ill health, the truth suddenly hit home.  They moved here because it was one of the few options available to them and they are able to rent cheaply enough to live relatively comfortably on a small pension - although of course the poor exchange rates hit them hard, as they do all of us on sterling based incomes at the mo'.  But I often wonder what it would have been like if they'd hated it here because there is no future for them in England beyond, perhaps, a council flat and a poverty striken end to their days.  Not a pretty thought.

Like Ernie, we once got into the Endowment mortgage loop, and got out of it in the same way.  Nice to think that at least we own the house we now live in because it would have been touch and go if we hadn't got out of the Endowment when we did.