France - Now is The Time to Buy

Is the market in rural France dead? Not at all, it has merely been suffering a virulent fever and is now returning to full health. Zoe Holt, of Holt Immo, gives her opinions and suggests now is most definitely the time to buy.

To understand recent trends in the French property market, it helps first to consider the rather particular nature of the UK housing market and the way in which this colours the attitude of most British people. For the British, property-owning has for generations been the real mark of wealth and security and the status to which we should all aspire. All the nouveaux riches industrialists of the 18th and 19th centuries rushed to acquire real property, thus legitimising their wealth. This attitude runs deep in our national psyche and continues to affect the way we behave towards property today. Thus, a house is seen as an asset, an investment, a retirement fund and a stamp of security; all these things before simply a home.

This British cultural attitude to real property, coupled with an historical over-demand in heavily populated Britain, has produced a property market which consistently over-performs. This in turn feeds the attraction of investing in property and so the story continues. There is an all-pervading pressure to acquire property and a feeling that you haven't really made it in life until you buy your first house. Property has become very aspirational; we "climb the property ladder" and our progress in this respect is taken as a measure of our success.

Our neighbours on the continent have never felt quite this attachment to being landed. Many people in continental Europe live out their lives in rented accommodation and do not feel the poorer for it. In rural France, you can couple this with severe under-population. There is less movement of people (except for youngsters moving away) and almost no moving house for social climbing reasons. People only move house if they really have to: because of a new job, divorce, etc. All of these factors combine to depress demand and so keep house prices by and large on a pretty even keel. So, the norm in France is nothing like the UK habit of long periods of remarkable growth in value with the occasional blip when recession hits. Rather, the market generally rises steadily year on year broadly in line with inflation.

This normally calm state of affairs was upset somewhat by the sudden large influx of foreigners into certain regions during the 1980s and 1990s. Much hyped during this period as the bargain spot to end all bargain spots, my department of Creuse enjoyed particular popularity and by 2002 was experiencing galloping house inflation. The startling rate of price rises at this time can be largely explained by the fact that they were ridiculously low to start off with. A few years ago, Creuse had the most aged population in Europe. The dual effect of emigration of the young and natural wastage of the old had left an over-supply of housing for the dwindling population. The beautiful old stone houses so beloved of the British and Dutch buyer are not generally attractive to the local market, so many sat empty for years and were worth almost nothing. Often it was the fact that the occupant had died and his/her heirs were distant and scattered and with values so low simply did not bother to sell the house.

When the incomers started arriving there was a brief period of "UK fever" which pushed the market here out of all balance. Buyers became reckless and sellers soon cottoned on to this and started asking silly prices. But then, as is the way with such excesses, the whole thing faded overnight. During 2005 the dreamers and tyre-kickers disappeared, the serious buyers started to get a bit more perspective and silly prices became a thing of the past. Many properties which had been placed on the market at greatly inflated prices stayed there for a long time, but finally sellers began to accept the truth of the matter and bring their prices into line.

A couple of years on and we see the market here recovering its equilibrium and returning to robust health. Most of the greatly over-priced stock has been either reduced or removed from the market and the new properties now coming up for sale once again represent extremely good value for money. As a bonus, the housing stock has been greatly improved in the intervening years. Buyers have become much cannier and better informed, helped along by the vast amount of information available via the internet. Sellers have become more open to negotiation.

All of which gives us a very solid, sensible and secure ground from which to work. If you have been toying with the idea of buying in France for a while, now is the time to do it! It is most definitely a good buyers' market right now, with quality houses available at extremely reasonable prices. Moreover, negotiation has become the norm rather than the exception. If you are accustomed to browsing the web looking at properties, it may not be immediately obvious that prices have stabilised in this way, but remember that the asking price is not the same thing as the selling price. The case study shows an example of this.

As an agent, I cannot pretend to regret the boom years, but I can honestly say they made me uncomfortable and on several occasions I found myself trying to convince someone NOT to buy a totally unsuitable property. Negotiation was well-nigh impossible and the whole atmosphere had a febrile quality to it that reminded me far too much of being back in the UK. Now I can be confident my buyers are getting a good deal, often a bargain, and life is much calmer!

EXAMPLE

We have a house on our books, close to the little town of Chatelus Malvaleix, in northern Creuse, has been totally renovated to a very good standard by professional artisans and could be occupied immediately. It has three large double bedrooms, a spacious kitchen and living room and two newly-fitted shower rooms. There is also an attached barn and another attached outbuilding plus an exquisite walled garden with wonderful views. This was on the market at 129,000 and sold recently for just 110,000, a true bargain for the lucky buyer.

Author: Zoe Holt