Well-heeled set returning to purchase property in France
More foreigners bought property in France in 2010 than they did in 2009, suggesting that the love affair with the country has returned as international buyers return to the market.
Sales of French properties to international buyers increased by 21% in 2010 from 42,300 in 2009 to 51,200 last year, according to the third Investing and Living Abroad survey by French bank BNP Paribas.
‘This healthy increase in transaction numbers is sure to attract some eye catching headlines and it does sit comfortably alongside our own view of the market, where enquiry levels and sales figures are both up on last year,’ said Trevor Leggett of international estate agency Leggett Immobilier.
He believes that the turn around is primarily down to the sensible pricing levels adopted by sellers who realise that economic turmoil and tightened lending conditions still abound.
However, he points out that this sharp rise in international buyers follows an equally sharp fall, 21%, in 2009 and it is important that agents and vendors alike understand that they must continue to value and market houses at sensible levels.
The survey showed that there is a significant increase, some 6%, in the average transaction amount up to €238,000, fuelled largely by the Ile de France, the area around Paris. ‘We too have found that buyers are spending more and we have been particularly active at the top end of the market on the Cote d’Azur and other prime areas,’ explained Leggett.
Similarly, it’s important to look at where these buyers are coming from. It’s clear that the rise in expat French nationals coming home is going to continue while UK buyers have consolidated their position as the third largest market behind the Portugal and France. Russian and Asian buyers remain small in terms of transaction numbers but continue to generate headlines due to the size and glamour of their purchases.
The real trend seems to be the overall decrease in buyers from western Europe in favour of a marked increase from new world countries such as Australia, New Zealand, South Africa and the United States. The BNP Paribas survey describes these buyers as ‘approachable, trusting and easier to please’.
‘We too have found that French property attracted interest from all over the world in 2010. In the last 12 months our website has attracted visitors from 171 different countries with the US and Australia showing increases of 52% and 33% in visitor numbers respectively,’ said Leggett.
Another trend highlighted by the report is the rise of the high net worth (HNW) individual. It’s clear from the statistics that there are an increasing number of people who have their own funding and often own properties in more than one country.
A recent Knight Frank Wealth Report surveyed 5,000 HNW’s with an average wealth of $100 million and showed that real estate is their most important investment making up an average of 35% of their portfolios.
‘This trend will continue to rise and France has an abundance of properties that will appeal to these people whether it’s a coastal property on the Cote d’Azur, a chateau an vineyard in Bordeaux or a house in the centre of Paris,’ said Leggett.
‘In summary, transaction levels are back to 2008 levels but the make up of these international buyers has seen a subtle shift. International buyers are increasingly turning to advisors who can offer a national network and level of support backed up with local expertise,’ he added.