Future for Overseas Property sales in France
Over recent years, the French property market has seen record sales, with a particularly strong demand coming from foreign buyers looking for French holiday hotspots.
The beginning of 2020 saw this trend continue, especially within France’s luxury property market. However, COVID-19 brought property sales in France to a grinding halt between March and May as the country entered lockdown.
With the easing of restrictions, property demand picked up during July/August time, with many agents revealing high levels of viewings and valuation requests. However, it seems the majority of this demand has been coming from French nationals.
The ongoing concerns of COVID-19, coupled with the uncertainty of Brexit could potentially have a lasting impact when it comes to property sales from foreign buyers.
Here we uncover the predictions from real estate agents of what the overseas French property market will look like going forward and the evolving demands of foreign buyers.
Paris to remain a hotspot for foreign buyers
Agents have stated that Paris will continue to encourage strong demand from both domestic and foreign buyers, despite global socio-economic factors.
Whilst 84% of Paris property sales currently come from French nationals, the top end of the demand comes from foreign buyers who view Paris as a necessity for their global portfolio.
Knight Frank stated that Paris property will remain appealing for international investors as many see it as an opportunity to benefit from record market prices in the hope of a potential economic slowdown.
It’s likely that there will also continue to be strong demand amongst properties within French ski resorts. Foreign buyers are consistently attracted to ski resort locations, particularly within the French Alps, due to the combination of slopes, bars and restaurants.
Demand remains strong within the French ski resort property market as supply is limited. Many locations restrict the number of new build properties being constructed to uphold the traditional, picturesque charm of the villages.
How has COVID-19 affected overseas property sales in France?
The biggest obstacle for many foreign buyers amid COVID-19 is undoubtedly the travel restrictions. Whilst this may not affect fellow Europeans, it could prove more difficult from potential buyers further afield. It is predicted that property sales and interest from America and Australia will significantly take a hit as a result.
Andrew Hosker from Blue Sky Immobilier, however, believes that lack of American activity on the French property market will be compensated by increased interest from Europeans. Notaires de France confirmed that the majority of purchases from foreign buyers tend to come from Britain (25%) and Belgium (18%). Following behind are Switzerland (8%), Germany (7%) and Italy and Denmark (5.5%). However, we are yet to see exactly how purchases from British buyers will be affected in 2021 due to the ongoing uncertainties of Brexit.
Sophie Folley from Sophie Folley Immobilier has stated that whilst overseas property sales have taken a hit this year, it has not become particularly noticeable due to the strong domestic demand of city dwellers looking for residency within the French countryside. It’s thought that the restrictions of lockdown have shifted the priorities of French citizens. The rising sales in countryside homes suggest the French are keen on greenery, wanting to be away from the cities.
Samm Khoury from Richard Immobilier on the other hand does not believe that there will be much of a slowdown from foreign buyers going forward. International buyers will likely continue purchasing a property in France as last year the country overtook Germany for the first time as the top country to invest in. In the eyes of overseas buyers, it seems that France will remain the country for profitable luxury city apartments as well as idyllic country homes.
French property prices 2020/21
Understandably, Paris remains one of the costliest areas in France to buy a property. Currently, the average price per square metre within the French capital stands at €10,593.
The average square metre within other French cities is dramatically less. By comparison, average costs in Lyon are around €4,980, €2,943 in Marseille and €2,990 in Montpellier.
Although property in Paris remains an attractive investment, it is thought that prices will not increase as much as expected as a result of the pandemic. Meilleurs Agent believes that property prices in the capital will rise up to 2% between now and September 2021.
French ski resort prices continue to be on the rise, with average property prices rising by 3.8% in Savoie and 18.4% in Haute-Savoie over the past 10 years. Prices within Méribel and Courchevel have also seen a substantial increase, with the average price per square meter rising by €4,272 and €1,842, respectively between 2017-2020.
It’s predicted that property prices within the French suburbs are also likely to surge. With more buyers seeking a more tranquil lifestyle, it’s thought that prices could increase by as much as 9% in areas such as Petite Couronne and 7.6% for Grande Couronne.
Agent predictions suggest that the outlook for the French property market will be promising on the whole. Whilst the appeal will continue to be strong for foreign buyers, it remains to be seen how COVID-19 and Brexit will affect sales from the UK and distant countries in the long term.
If you are looking to buy property in France, find out more about the Dos and Don’ts of Buying in France here.