Should you be selling property in France quickly this year as it is likely to be a make-or-break year for the property market in France, as we are heading into a time of great political uncertainty? France, in Western Europe, encompasses medieval cities, alpine villages, and Mediterranean beaches. Paris, its capital, is famed for its fashion houses, classical art museums including the Louvre, and monuments like the Eiffel Tower. The country is also renowned for its wines and sophisticated cuisine. Lascaux’s ancient cave drawings, Lyon’s Roman theater, and the vast Palace of Versailles attest to its rich history.
The UK has already left the EU. There are concerns that Frexit – or a French exit of the European Union – could be the most prominent theme after the next French Elections.
#1: The French economy faces major problems
The French economy grew by 1.3 percent last year and is expected to grow at a similar pace this year. The growth rate should increase into next year, to 1.4 percent and 1.5 percent respectively. The main issue here is that France has a large fiscal deficit problem and so far, the government has looked largely powerless to plug the deficit.
The last outgoing President tried a number of austerity measures such as cutting down on some of the social welfare programs, pensions and curbing the unionisation of the industry, but much of that has failed. This has a direct bearing on the residential property market. Let’s see how.
#2: The French property market is doing pretty well
The property market in France has been performing well despite the challenging situation in the mainstream economy. Property sales were up by 16 percent last year and this year has been a good year as well.
The real estate market here has hit its fastest growth rate since the aftermath of the 2008 housing crisis. Property prices had bottomed out after 6 years of the crisis, in 2014, and since then the housing market has been on the rise.
Property prices have been up by 2 to 3 percent in recent years. This is a decent growth rate. Some regions such as Bordeaux, Nantes and Toulouse have experienced a much faster increase in property prices, of 6 percent and above. Paris and the French Riviera region have been doing exceptionally well. This is certainly good news for France.
#3: Huge demand from overseas investors
There has been a huge demand for properties in France from overseas investors, especially from emerging nations such as China, Russia, Brazil, etc. The Chinese, in particular, have been busy buying luxury apartments in some of the most expensive neighbourhoods in Paris.
Britons remain the biggest buyers of French property, despite temporary setbacks such as Brexit. While the British interest has been in the decline since the Brexit vote and the subsequent fall in the pound’s value, it has picked up in recent months as the situation has stabilised to an extent.
Germans, Scandinavians, Belgians, Swiss and Italians are among the traditional buyers of properties in France. The interest from these countries remains strong, and we don’t expect any change in that in the future either.
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