Selling Property in France ? Things To Consider

Is this the right time to sell property in France? It’s hard to give a definite answer to the question, but let us consider the facts. The French economy grew by 1% in 2021, which is pretty decent for a developed country. The mortgage rates in France have been low as well, which is a big positive for those looking to buy property here. Overseas investment from other parts of Europe, Russia and Scandinavia has helped this along.


However, the housing market in France is still pretty much dormant. For sure, home prices are stable, as they always are in France, but they are certainly not rising as much as in the UK, US, Spain and Ireland. Property prices rose by 158% in France from 1998 to 2011, but since then, the growth has slowed down to a great extent.


The market has corrected more because of natural factors than because of anything that is not directly related to the French economy, such as the subprime mortgage crisis of 2008, which never really affected France. One might say that the present state of real estate in the country is closer to the market fundamentals.


So, the slowdown is not a bad thing, really, as it adds stability to the property market in France. There is less speculative activity in French real estate, even in Paris, which is good news, indeed. Mortgage rates in France have been declining for over 3 years now, with decreasing yields on 10-year bonds.


Strangely though, the decline in mortgage rates hasn’t led to a jump in demand, as investment in new properties remain relatively subdued across France. The investment in real estate is expected to pick up in 2022, but only slightly, by up to 0.3%.


For sure, home prices are rising across France, but only modestly. The credit situation in the country is pretty good, much better than it was in 2007-08. Banks have tightened the conditions for taking out a loan, such as loan-to-value ratios and income requirements. Buyers are also required to have an insurance coverage for their new homes. Screening by lenders is a lot more rigorous than it has ever been, and it is much difficult to get a loan today to buy new home than it has been at any point in the recent past.


While this curbs speculation in real estate, it also has the effect of driving down prices by a certain extent. It is certainly a buyer’s market in France, and properties are available for a bargain, compared to similar properties in the UK or the US.


This is great news for British buyers, for whom France has always been a top destination for their overseas property investment, along with Spain. The strength of the British pound and the relative weakness of the euro have put them at a great advantage.


Properties are available for a bargain, especially in the French Alps and the South of France. The dream of owning a beautiful French vineyard in the countryside may yet become a reality for many.


The European Central Bank has done its bit to drive prices up with its policy if quantitative easing, but that’s unlikely to help in the near term future. In fact, home prices in France will continue to remain low until the end of 2022.


In fact, experts say that the housing market will continue to languish till 2023, after which we may see a rebound because of decreasing unemployment, higher incomes, higher demand from abroad, and a much better economic outlook contribute. Till that happens, France will continue to be a buyer’s market.

Compare listings

Translate »
%d bloggers like this: