Expat buyers give French property "buoyant" year
The French property market has been a good investment for many foreign-buyers over the last year with prices of flats and houses rising by between 4% and 8% respectively in the sought after areas of Nice and the Cote d'Azur, whilst prices in the Paris region have risen by between 3.8% and 6.2% for houses and flats respectively, according to data release by government controlled Notaires de France which equates broadly to the conveyancing solicitors data unit.
At the same time, the numbers of UK buyers in the Paris region has remained stable at around 2% of all transactions, according to data from BNP Paribas, whilst for France overall, the percentage of UK buyers dropped slightly from 11% to 9%.
Commenting on the figures, Tim Harvey, managing director of Offshoreonline.org, specialist French mortgagee brokers said, "In Paris, as in London, we can see the importance of the international buyer who has certainly contributed to the overall buoyancy of the market. Likewise, in Nice and the surrounding areas, Asian and Eastern European buyers will have provided underlying strength to the market."
Elsewhere in France, the story is more mixed, with prices stable or rising, but by more modest amounts, these areas not benefiting so directly from the overseas buyer.
One contributing factor to the health of the French mortgage market is certainly the willingness of the banks to lend. Whilst for the UK buyer the story has been one of disappearing banks, in France lenders have stood firm and continued to offer attractively prices mortgage funding. Tim Harvey explains, "We can source variable rate euro mortgages for expatriates from 2.3% with 10 year fixed rate euro mortgages available from 3% and interest only mortgages from 3.25% from a number of banks, so there is no shortage of choice of lender or product. Whilst each lender will have their own underwriting requirements, the overall picture is a healthy one with plenty of choice."
Exchange rates will have played their part in affecting buyer sentiment too - for the UK buyer the position is now healthier than it was some months ago with the pound trading at around ?1.25 from ?1.14 a year ago, so giving buyers an effective price discount. For dollar linked currencies, exchange rates have also moved broadly in their favour over the past 12 months making property cheaper for the dollar based buyer, but the euro is now strengthening again to remove some but not all of that advantage.