Nervous Real Estate Conditions In France
News Posted On: 21 January 2013
The property market conditions in France are very nervous at the moment according to Marc Tison, an agent and developer with Orpi, a real estate firm. The residential real estate market in France has been facing tough times for a while following housing bust. However, steady growth over the past couple of years signalled positive signs for the economy. But prices have continued dropping in recent times as Mr Tison revealed that they are about ten per cent lower in comparison to early 2012.
Joelle Larroche, a real estate broker working for Douglas Elliman in NYC and a property seller in France said that 2011 was the worst year for real estate in the country since 2008. Sellers have not been impressed with the offers they receive for their properties and as a result, refuse to lower their asking prices. Larroche added that sellers would rather not sell than reduce their prices. Skittish lenders, high unemployment, huge debt and low productivity have been identified as the reasons for the poor performance of France’s property market.
Good Sales in Normandy
Normandy is one of the regions in France that is attracting considerably high interest from overseas investors. Many investors look at Normandy as the ideal location to acquire a second home outside Paris. Ms Larroche said that international buyers are spread out across France, and most of them come from EU countries. She added that Italians have also entered the French real estate market due to the Italy’s unstable economy.
Foreigners are able to purchase real estate in France without any restrictions. The transactions are usually handled by notaries. The buyers’ interests are well protected. The real estate agent or notary is responsible for drafting contracts. Normandy is one of the regions where transactions are carried out with relative ease, and at the right prices. Buyers are now offering fair prices for the properties they are interested in, leaving sellers with little choice but to accept their offers. Although France seemed to be doing well in terms of getting itself out of the economic slump, the decision of the new government to inflict a high rate of tax on people earning incomes of over one million Euros has seen several French families leave their country for greener pastures.
Sharp Price Drops in Rural Areas
Real estate prices in rural parts of the country have reduced significantly over the past four years. From mid-2008 to June 2012, prices have dropped by just around three per cent across the country. However, the rural areas have been ignored when calculating the figures. Creuse is one of the worst-hit regions where prices have dropped by almost 16 per cent over the past four years. Loir-et-Cher recorded a drop of 12.5 while Moselle experienced a drop of 11.5 per cent. Correze saw home prices fall by 10.8 per cent, Tarn by 10.6 per cent, Haut-Rhin by 10.5 per cent, Bas-Rhin and Ctes-dArmor both by 10.3 per cent while Haute-Vienne experienced a drop of ten per cent. .
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Written by Les Calvert
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