France : Fewer foreigners buying in France as housing market shows signs of improvement


Foreign buyers are not yet returning to the French property market with the latest figures from Notaires showing that numbers have dropped almost threefold in the last decade.

Overseas buyers made up just 1% of property sales in 2015 compared to the peak of 2.8% in 2006, just before the global economic crisis. This number dropped to 1.4% by 2014 and then to 1% in 2015 and numbers are not likely to rise much in 2016.

But there are signs that the property market in France is picking up with figures, which exclude new builds, from the Notaires showing that overall house prices increased by 0.4% in the final quarter of 2015 while apartment prices rose 0.3% in metropolitan areas, but are down 1.6% and 1.9% year on year respectively.

In Paris and the surrounding area house prices increased by 1% in the third quarter of 2015 and apartment prices were up by 0.7%, House prices are now down 1.1% and 1.3% year on year respectively.

In rural areas house prices increased by 0.2% quarter on quarter but apartment prices fell by 0.1%. House prices are down 0.7% year on year and apartment prices down 2.3% year on year.

They predict a stable market in the coming months with apartment prices up around 0.4% and house prices by 1.4% by the end of the first quarter. The report adds that a year on year rise in sales of 12.5% up to the end of November 2015 bodes well for the market in 2016. This level of sales has not been seen since Spring 2012.

British buyers still make up the majority of overseas buyers, purchasing some 32.6% of foreign bought property in 2015. The next most common nationality was Italian, at 15.3% and Belgians at 11.1%.

The most popular parts of France for British buyers remain old favourites like Normandy, Brittany, the Dordogne and the Loire. They buy just 7% of foreign owned property in Paris.

In Normandy and Brittany some 72% of buyers are British, 10% Belgian and 3% German, while next door in an area covering the Loire and Dordogne some 78% of foreign buyers are British, 6% Belgian and 5% Dutch.

The British are also the biggest group of foreign buyers in Aquitaine and along the Spanish border towards Provence at 42% with 15% Belgian and 12% Spanish or Portuguese. While in the Alps and down the Rhone some 32% are British, 22% Swiss and 12% Belgian.

In PACA the largest group of foreign buyers are Italians at 28%, British at 15% and Scandinavians at 12%. In the North East 28% are Belgian, 17% British and 14% Dutch while in an around Paris 20% are Italians, 8% American and 7% British.

Despite the fall, the report from the Notaries’ indicates that the financial climate for foreigners, particularly British people due to currency rates, for buying a house in France remains positive.

The Notaries’ report says that since the Spring of 2015 the property market has been fluid but prices do vary on a regional basis and depends very much on availability. In central Paris, for example, there is a shortage of studio and small flats which means that asking prices are being realised with no room for negotiation.

But a breakdown of the figures reveals considerable regional variation. The biggest quarter on quarter fall for apartment prices in cities was a decline of 11.7% in Saint Etienne, followed by Toulon down 9.6%, Nantes down 5.8%, Dijon down 4.5%, Lille down 4.2%, Besancon down 4.9%, Montpellier down 2.2% and Toulouse down 1.8%. Elsewhere prices were stable.

For houses in cities the biggest price fall was in Besancon where values fell by 10.6% quarter on quarter, followed by Toulon down 6.7%, Nice down 5.5%. Dijon down 4/8%, Nantes down 4.5%, Marseille down 3%, Lyon down 1.7% and Orleans down 0.2%.

House prices were unchanged in Montpellier, up by 1.5% in Toulouse, up by 1.8% in Strasbourg, up by 2% in Bordeaux, up 2.5% in Rennes, up 3.6% in Grenoble, up 6% in Saint Etienne and by 6.6% in Lille.

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