Based on recent statistics from real estate agents in France, property has been a huge market during the first quarter of 2017. Unexpectedly so because this time of the year is usually quiet. Any professional would concur with this so what happened? Well, as we see it, it is a combination of factors that contributed to buyers flocking for the property of dreams. One of them we saw it coming, low interest rates and prices raising again. But there is more to this, we will analyse this for you.
The end of optimal financing conditions
2016 was a year to remember when it comes to property in France. The official number for sales beat all expectations: 845,000 new property owners! Of course, the lowest interest rates ever contributed to that surge. We had foreseen this earlier this year after our 2016 review actually: Property review in France.
The winter of 2016 was also the beginning of the end. Interest rates could not get lower. At the same time, prices starting raising seeing that the demand was increasing. That triggered a lot of pending acquisitions. Buyers were waiting for the optimal conditions to purchase the best property at the lowest price. And they did. So what now, is it still a good time to become a homeowner in France?
Property as an investment
Owning a property in France remains costly compared to other countries like Germany, Belgium and the Netherlands. But compared to the UK; France is 25% cheaper according to a Deloitte survey from 2016. No wonder as France remains number tourist destination in the world. Numerous visitors decide to pursuit the adventure. They either buy a property for holidays, a home to retire or a place to invest. 18% of those wanted to become a homeowner in France were investors last year. This was a steep increase compared to 2014: only 11%.
New homeowners and impact on prices
There is another segment of the population which flocked onto property market last year, first time buyers! For some agencies, the figures were quite high, nearly 41% of new clients. The year prior, it was only 30%. Because of their interest as well as property investors, prices have been on a steep rise too. In Paris, for example, on average, costs of property increased by 5%. That is true in other cities too, Lyon, Nantes and Bordeaux are also seeing similar trends. The fact that Bordeaux will soon be only 2 hours away from Paris on TGV is one of the reasons.
Activity did not really slow down last winter. The presidential elections usually have an impact on acquisitions too. But 2017 seems different as buyers are not really expecting changes which could also affect property ownership. On top of that, mortgage conditions remain extremely favorable. We therefore recommend to get in touch with one of our advisors if you are ready to become a homeowner in France, the time is now!