France is climbing back up the popularity ladder
when it comes to foreign real estate buyers according to Google. Their search
data shows a strong increase in demand among foreigners looking for property in
France: in Q1 2015 search queries were up 18.8 % on the same period last year.
Although Russian buyers have almost disappeared, the British are renewing their
love affair with the République and gradually returning to the
market after a prolonged absence.
House prices are easing in many locations, fixed
interest rates have hit record lows and thanks favourable currency exchange
rates, if ever there were a time to by property in France says Tranio.com an international real
estate broker.
Falling prices
The market in âIle-de-Franceâ (Paris) has seen
prices fall by 1% during the first quarter of 2015 according to figures
published by National Federation of Real Estate (Fédération Nationale de
lâImmobilier, FNAIM) and it doesnât stop there. Prices are going down across
the country and Knight Frank is reporting 2.3% drop last year. Forecasts
confirm this trend for 2015 with experts suggesting 1.0â1.3% decline this year.
While this situation is beneficial for buyers in the midrange market, no strong
impact is forecast for the high-end property segment.
According to Meilleursagents.com, the average
square metre in Paris is selling for â¬7,810, in Nice at â¬3,754 and in Biarritz
for â¬4,799.
Some experts believe that French property still
remains overvalued and new apartments are showing stable prices despite the
general slowdown. According to French Federation of Property Developers
(Fédération des Promoteurs Immobiliers, FPI), the average price for a new home
has even slightly increased: â¬3,945/sq.m in comparison to â¬3,932 in 2014.
Interest rates hit record
low
French mortgage rates are at an all-time low.
Buyers can secure a 20-year mortgage at a fixed rate of 2.3%, according to
Empruntis. Interest rates on 7-year loans vary from 1.11% to 2.9% and even the
maximum rate for 40-year loans is only 4.1%, which is nevertheless relatively
low. Non-residents can get a mortgage in France capped at 60â70% of the
property value with maturity terms of 5â25 years.
Exchange rates bliss for
dollar and sterling spenders
The euro declined by 68% against the dollar and
57% against the British pound since May 2014 according to Oanda.com. This means
that buyers from Britain and the States have significantly improved purchasing
power in Europe. With the pound sterling worth â¬1.39 (up from â¬1.23 in May
2014), the price of â¬1M house in France has fallen by £93,800: from £811,600 to
£717,800, meaning big savings for smart investors.
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