Can we stop hyping French property prices please

Just read this very positive article about people moving to France in the Daily Telegraph.

Entitled "Vintage investments: buy a house in France" it's the kind of feature that brings clients to my door and I echo many of the sentiments expressed in the article.

You might then say that it's a bit churlish to complain about it....but I'm going to anyway.

"France remains the foreign property dream: sunshine, scenery and, mais oui, the food. What’s more, the beating that the euro has taken of late means that now is a great time to buy. On the one hand, France isn’t about to go bankrupt, but on the other, the situation in Greece, Spain and Italy is dragging down French property prices.  

All of which explains why British interest in French real estate is on the up. “Between June and September last year, we saw an increase of 192 per cent in requests for our guide to France,” says Richard Way from the Overseas Guides Company".

Hmmm - we know British interest is on the up because Mr Way has sold more guides.  Is this really the best indicator that The Telegraph can come up with?  His guide may be truly brilliant but if he sold 23 this year and 12 last year then that's a 192% increase.

"Overall prices in France rose by 4.3 per cent in 2011, and look set to rise this year".

Hmmm again - that's a pretty broad brush statement (and didn't they say in the first para that French property prices had been dragged down).  If overall prices in France rose last year it was only on the back of a red hot Paris market which saw double digit growth.

Believe me, prices in most parts of France didn't rise anything like 4.3% last year and I'd love to know on what grounds The Telegraph are confident enough to say that they will rise even further this year.  We have an election coming up, no-one knows who will get in or what changes they will bring about.

Don't get me wrong.

I firmly believe that the French property market is more stable than just about any other in Europe.  I believe that there are some great deals to be had whether buying as a home or an investment.  I believe that there is a rock solid underlying demand from international purchasers who love France and want to buy here. 50 million tourists come here every year (it's the most visited country on the planet) and they do so because it's a great place to holiday, live and work.

But hyping the prices here is a bad long term thing to do - the market is trundling along pretty well on the back of sensible pricing and realistic expectations (from vendors and agents alike), let's not stall it.

If a publication as well known and well respected as The Daily Telegraph is going to write an article like this then it should be on the back of some proper research (BNP Paribas do a great bi-annual study on this subject or try the FNAIM or Notaires de France) and not because Mr Way has increased his sales and is brilliant at PR.

www.cognacproperty.com

What is a "bargain" price

It's a strange market here in France at the moment.  Some vendors have slashed prices (from a silly starting point in most cases), some refuse to budge and - according to Century 21 at least - some have put prices up.

There's an online tool that helps you track individual house price changes on portals such as Se Loger and you can while away many an hour just browsing around.  I don't want to give away too many trade secrets on here but send me a direct email and I'll send you the url.

One terrific house that I visited recently has come down in price by over €100,000.  On the surface it looks as though it's now a real bargain but, of course, one can't automatically assume that this is the case.

It's my job to try and find other similar houses as "comparable evidence" so that between us my client and I can make a proper judgement as to whether it provides value for money.

I have a mandate going through where my clients had an offer accepted that was around €20,000 (8%) under the asking price.  The house had just come on the market and had been competitively priced and we think that we have struck an exceptional deal.

Don't be misled by dramatic falls in price or, alternatively,  put off by owners refusing to drop much.....research, research, research and then act decisively and you won't go far wrong.

www.cognacproperty.com

French house prices rebound.

Just read this very bullish report from the Global Property Guide.

Quoting statistics from the FNAIM the report begins with the statement:

House prices in France rose 3.9% q-o-q in Q2 2009, after several quarters of price falls, according to the National Association of Real Estate Agents in France (FNAIM). France’s economic recovery has surprised market players and government officials, and is attributable to a fiscal boost, and to automatic stabilisers such as welfare support. When adjusted for inflation, the average house price rose by 2.97% over the same period. These quarterly price increases are the highest since Q2 2004.


They then go on to praise the way that the mortgage market operates over here and claim that foreign buyers of second homes in France can still get 100% mortgages.

It's worth reading the full article if you have time.

www.cognacproperty.com