French Property Market Could Stall in 2011 says Leading Agent
01 December 2011
The French property market is likely to stall next year unless agents take a "realistic" view of pricing. This according to one of the country's leading agents speaking to OPP.
Trevor Leggett, head of real estate firm Leggett Immobilier, said: "In the UK transaction levels are likely to be their lowest for 40 years, there are no figures available for the French market yet but they will certainly report a slowdown in the second half of the year.
"If you take Paris and Provence-Alpes-Côte d'Azur out of the equation it is clear that the regional market has not been so buoyant."
Crucially, says Leggett, "Credit Agricole is forecasting a national fall in prices of 5-6% next year with an 8% fall in overall sales."
"It is the latter figure which is significant. The market is in danger of stalling unless we all take a sensible view on pricing. If owners and estate agents are realistic with their expectations and valuations then the French property market can remain amongst the healthiest and most attractive in Europe."
It is no secret nor surprise that today's investor puts safety above returns when making decisions about where, when and what to buy.
During the boom investors were chasing the highest yields. This was often at the expense of the French property market. But this has all changed now. According to William Souche, international sales coordinator for holiday residencies group Village Center, also talking to OPP, investors are now much happier to take a safe 4-5% than the chance of a higher return for higher risk.
A prime example of this in action is the revival witnessed in the French leaseback sector over the last 12 - 18 months. During the boom investors sniffed at the 4-5 percent rental yields guaranteed by leasebacks. But now, investors are focussed on the fact that the guarantee is backed by the French government, than the fact that it is 4-5 percent.
Catherine Houziaux, international sales manager at Village Center, said: "Clearly investors (would be upset) at the change in rental figures but the lesson even today is that promises of high rent on new build property should be treated with caution."
Prices are fluctuating too, with the French real estate professionals' organisation FNAIM reporting falls of 4.6% in Britanny and 10.1% in the Champagne Ardenne region.