Monday, December 25, 2006

Property Investment in France

France is the country of romance for some – the Eiffel Tower, the Champs Elysees, little sidewalk cafes, the sensuous language and the delicious food. A sense of surrealism still surrounds the country – with its glamorous cities that rank amongst the world’s fashion capitals, and its rustic charming countryside. One of the most popular tourist destinations in the world, France attracts over 70 million tourists annually. With its chateaux, vineyards, farms, apartments, beach houses and other types of property, there is a home for everyone in France. It is regarded as a great country to visit at least once in your lifetime and has a number of large urban centers and smaller towns that remain popular with tourists and would-be residents alike.

France is not the place to invest lightly – the current prices require a serious amount of money for any good property investment. As the prices in cities have risen, the demand for real estate in the interior and in small towns has increased, causing prices to rise across the board. It will be hard to find any undiscovered gems in this saturated market, but it is still possible. The strength of the Pound relative to the Euro is one reason that experts predict continued demand from the British for both buy to let and off plan purchases. The prices have recently seen a high but are expected to stabilize in 2007, say experts and agents.

On a positive note for the potential investor, there has been growing concern that people have pulled their money out of capitalized markets to invest in emerging markets across Eastern Europe and other areas, which has led to some easing in the overpriced French market. Younger investors have been buying off plan investment properties, so these developments have seen some demand. Further, those seeking buy to let properties for supplementing a pension scheme will find the returns come sooner than those in an emerging market.

France has a well developed legal system that works, as opposed to some developing countries. This provides the buyer with a great sense of security in the processing phase and during all the formalities. Further, the strength of the domestic market means that buyers are assured of being able to sell out as and when they please. The anticipated correction in prices in 2007 is expected to bring good demand and renewed interest in the French property market over the course of the year.

Additionally, the situation varies depending on the area within France. The legendary, wealthy south of France has seen strong demand and stable prices that are expected to continue. Agents claim that buy to let properties are gaining popularity amongst buyers of new real estate. In Provence, Lot and Aude, prices have risen recently, and Languedoc is being touted as the next big thing. Quercy has seen increased interest in older property, particularly property development opportunities.

A number of people seek older homes suitable for property development in France and there is a sizeable stock of such places. It is important to remember that property can not give you guaranteed returns, no matter what the agents tell you. Larger cities are more appropriate for buy to let properties due to a better developed rental market in these areas. With the heavy demand for high quality rentals, a carefully selected property can still yield over 6% on top of capital appreciation. This is ideal if you are looking for investment property pension in the shorter term.

2 comments:

mpprh said...

Hi

Languedoc is still cheaper than Cote d'Azur, Provence and most French cities.

It has been a very active market for the last 5 years. The TGV brings it into the Paris weekend (and later retirement) catchment area.

The city of Montpellier is growing at a rate of 1000 arrivals per month.

A useful newsletter here : http://the-languedoc-page.com/phpBB2/viewtopic.php?t=841

Peter

Linda John said...

I guess cheaper is not correct to use cheap is ok because it is less than others but I guess it is not so less so that we can say very good.


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