News
French property market slows
French property may soon represent a more affordable investment, as the French housing minister has warned of a fall in the country’s average property prices
In a meeting with the French Parliament, Jean-Louis Baroloo said that there will be "a marked fall in prices" that would see the country "return to a normal market". A report prepared by his ministry claims that "sales prices are now falling and the rise in rental prices seen in 2006 is the weakest since 1999". The report indicates that growth in supply is the major factor in the development of the predicted price recession.
Although independent figures do not as yet support Baroloo's prediction of price depreciation, two separate reports have indicated that the French property market is slowing. The September figures of FNAIM, the French estate agents association, show that prices have risen 7.6 per cent this year – a figure that seems buoyant until you recall that property prices increased around 15 per cent in the summer of 2004 alone.
Economic research group BIPE has also predicted that price increases for 2006 are likely to be around 6 per cent. Its report, the conclusion of an analysis of the financial pressures and changing demographics of France, also suggests that house prices next year may fall by
approximately 4 per cent. Whether now is a good time for you to invest, however, depends on the type of property you wish to purchase. Sarah Francis, director of Sifex (specialists in prestigious French real estate), believes that Baroloo's comments do not implicate the market of 'character properties' in France, but refer to new and recent builds. "Châteaux in general have maintained their value, and in the past 12 months most have achieved their asking prices", she says. But as Francis observes, character properties are not typically purchased for their investment value. "Our clients buy the sort of properties we specialise in – Chateaux, Manoirs and character properties – for the love of France and the lifestyle there." Yet, if Baroloo is correct, those less plump in pocket can soon hope to combine a love of France with a reasonably-priced investment.
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17 December 2006