Upturn Expected In French Property Prices
News Posted On: 06 February 2013
The approval rating of French Prime Minister Francois Hollande, with another round of budget cuts and tax increases, has provoked a harsh reaction from patriotic artistes, wealth creators and chef-class entrepreneurs. Yet, France continues to remain among Europe’s brighter economies with its residential property market proving to be a ray of light at the end of a dark tunnel. FNAIM’s latest report predicts a deflationary reduction of 1-5 per cent in home prices across the country in 2013. Major cities in France are expected to achieve rebound profits of 3-8 per cent.
La Residence’s real estate expert, Mr Stephen Hilton said that the recovery process is slow-burn and is fuelled mainly by sellers who have adopted practical pricing strategies due to tightened lending and economic uncertainty. Hollande’s announcement to increase the rental income tax for international buyers and the potential rise in taxes pertaining to capital gains have not had an adverse effect on buyer volumes as expected. According to TorFX’s foreign currency expert Ian Cragg, the value of currencies outside the Eurozone have not dropped as much as the Euro itself, and this has enabled a large number of international investors to express serious interest in acquiring French properties.
Permanent Relocation is the Main Aim of International Investors
More than forty per cent of those interested in investing in the French real estate market have the intention to relocate to France. A good percentage of retirees have been looking to make their stay in France permanent, with a view to making the most of the country’s double-taxation deal with Britain. While some sections of the market wish to purchase second homes in their dream destination, most others, especially retirees, are hoping to live permanently in France post acquisition of a property.
Rise in Prices Led by Paris
Paris is expected to lead the nation as an upturn in prices seems all but imminent. Cutting-edge projects in the capital of France are attracting high levels of demand from overseas buyers. The development of neighbourhoods and new residences is expected to grace the French real estate market, thereby inviting an influx of investment. Sarah Francis, an agent working for London-based realtors Sifex, believes that prices in the better neighbourhoods are dropping as a large number of French families are fleeing the country in order to avoid paying high rates of taxes. According to her, most of the interest is now expressed towards design-conscious and affordable alternatives. Three neighbourhoods are expected to be redeveloped this year.
Other Areas That Will be Redeveloped
Massena, Tolbiac and Austerlitz will feature 5000 new homes once their redevelopment is complete. Prices will remain competitive, with 8000 to 10,000 Euros being charged for each square meter of a luxury home with two storeys. These prices are considered far more favourable than the 16,500 Euros per square meter in top districts such as Luxembourg and St Germain. Following in the footsteps of the capital, other regions in the country, such as Brittany, Gironde and the Midi-Pyrenees are also expected to see the development of residences that will attract plenty of interest from foreign investors in 2013.
Written by Les Calvert
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