The French property market, reported to have trundled through the crisis much better than Spain, the UK, the US and many others is now thought to be 2 years into full recovery according to data. The Global Property Guide index, which is regarded as an accurate index because it measures prices after inflation recorded a 1.58% increase in French property prices in 2009, followed by a 0.33% rise in 2010.
None too spectacular right? Right, but like so many places, the recovery in France, just like the decline was — is vastly different on a city by city, region by region basis. Equally, the holiday home market is now thought to be in recovery, but again, depending on what segments and locations you look at.
Data from the French National Association of Estate Agents shows that Paris apartment prices (per sqm) grew 9.7% in the year to end the third quarter of last year).
According to the French National Association of Statistics, French property prices grew 13.8% during the period. Growth was equally strong in the suburbs surrounding Paris, with a 12.07% y-o-y growth in Ile de France — the entire Parisian metropolis, an 11.6% growth in the Petite Couronne (Little Ring) and a 9.12% growth in the Grande Couronne (Large Ring). During the same period property prices in France grew by just 0.6% according to the Statistical body.
An article in the Guardian shows the same tale can be told of the French holiday home market, not only in the signs of a fractured recovery, but also in the tale of the depression.
According to the report foreign buyers of French property are typically better off than those buying in Spain, and are buying at the mid-top end of the market. It is little wonder given the reportedly huge problem of oversupply of holiday accommodation at the lower end of the market.
The Guardian quotes a Richard Dale, from his blog (blog.rhf-international.com) about running a Gites rental business in France. Dale who moved to France in 2003 to run an estate agency tells of the massive growth in the number of Gites complexes. “The number of tourists has risen, but nothing like as quick as the amount of accommodation,” says Dale.
Lanisha Butterfield of Holiday Lettings.co.uk explains that in order to achieve good occupancy rates, Gite owners are cutting rents. Tourists can easily find that hiring a cottage for a week in France in high season can be cheaper even including ferry costs than a comparable property in Cornwall, said Butterfield.
Graham Downie, who runs Cognac Property in western France talks of buyer’s moving away from the oversupplied Gite market towards higher end properties.
“In the area around Cognac I’ve seen a move away from the seemingly obligatory gate complex. Most of my searches now are either for family homes in good condition, with views over the vineyards, priced between €250,000 (£217,418) and €400,000 (£347,767), or for townhouses with a small garden or courtyard between €200,000 (£173,883) and €300,000 (£260,825),” says Downie.
Unsurprisingly then the decline and recovery in the holiday home market are both unbalanced in favour of the high end segment. According to the Guardian French property prices have fallen around 10-15% over the past 5 years. New build properties, including Gite complexes fell in price by 20% on average in 2009 alone.
Unsurprisingly the recovery would follow the same logic. Contradicting the National Association of Statistics, the FNAIM says French property prices rose 6% in 2010. However other reports tell of prices in the oversupplied Gite segment still struggling, as are new build properties, and less affluent areas, with price growth in the mid-high end skewing the overall picture.
Photo credits: Ana via Flickr