Stability returning to France’s second home markets
France’s property market has trod an uneven course over the last decade but 2015 saw renewed optimism which led to a significant upturn in sales.
2 minutes to read
Residential sales across France increased by 12.5% year-on-year according to the Notaires de France as a more stable economic outlook filtered through into buyer sentiment.
This trend was reflected in our own data. Knight Frank’s sales in France doubled between 2014 and 2015, whilst enquiries from prospective buyers increased 87% year-on-year.
With favourable mortgage rates of circa 2.3%, prices stabilising in most prime markets and the euro weak against both the pound and the US dollar, buyer confidence has strengthened.
Yet this confidence is price dependent. Sales volumes are strongest within the €1-€5m price bracket but transactions above €5m are slow.
Two indicators underline the extent to which the market has shifted in the last 2-3 years.
Firstly, the performance and convergence of France’s prime prices. Not only have prices reached their floor in the majority of France’s key second home markets, but all of our five regions saw prices shift within a range of only five percentage points (-3% to +2%, see map below). For several years we saw a marked disparity between France’s strongest and weakest markets, this has now all but disappeared.
Secondly, the excess supply that was evident for several years in areas such as Gascony and Provence has now largely been absorbed back into the market. Add to this the slow recovery in house-building – the number of homes under construction in France has fallen from 469,000 in 2007 to 352,000 in 2015 – and it is possible that when prices start to pick up they could do so relatively quickly due to limited stock levels.
Our new Inside View report sets out some of the key property market indicators for those considering a second home purchase in one of France’s most popular destinations; from price performance to current stock levels and key buyer nationalities active within the prime market.
